Strategic Enterprise Transformation (SET) Business Development Training Bill Chan [email_address] January 2011
Definitions & Buzz Words
Definitions & Buzz Words <ul><li>MSA –  Master Services Agreement </li></ul><ul><li>SOW –  Statement of Work </li></ul><ul...
Definitions & Buzz Words (p2) <ul><li>Role   –   Function or activity performed as part of a job </li></ul><ul><li>Job Fam...
Context
Essential IT <ul><li>Role of IT </li></ul><ul><ul><li>Efficiently deliver the products and services needed to enable busin...
Services Overview (Full) <ul><li>Organization </li></ul><ul><ul><li>Organizational Change Management </li></ul></ul><ul><l...
Framing the Problem
Common “People Problems” We have co-employment issues with our contractors We can’t afford to lose our contractors – they ...
Potential Causes   of “People Problems” <ul><li>Reactionary staff management </li></ul><ul><li>Lack of transparency into w...
Enterprise Current State <ul><li>How did we get here? </li></ul><ul><li>Increase Effectiveness </li></ul><ul><ul><li>Align...
Enterprise Transformation Drivers <ul><li>Growth – Need more People </li></ul><ul><li>Efficiency – Do more with the same (...
Ready, SET, Go
People Value Curve – Efficiency & Growth Business Value IT People Cost Current Leading Practice Potential
Optimized Staffing Workload Utilization Staffing
Strategic Enterprise Transformation (SET) <ul><li>A data driven methodology that enables management to: </li></ul><ul><li>...
What We Deliver <ul><li>Developing Guiding Principles assistance  </li></ul><ul><li>Employee and Management Communication ...
What We  Don’t  Deliver w/ SET* <ul><li>Execution Plan </li></ul><ul><li>Statements of Work </li></ul><ul><li>Process impr...
Methodology
How we do it <ul><li>Leverage an Efficient, Proven & Repeatable Methodology </li></ul><ul><ul><li>Define Scope & Create Pr...
Guiding Principles Example <ul><li>Organization </li></ul><ul><ul><li>Consider all staffing options for organizational opt...
Staffing Optimization Model Example Strategic Importance Degree of Business Collaboration Non-Strategic, Commodity Flexibl...
Role Data Example <ul><li>Pat – Infrastructure Engineer </li></ul><ul><li>SAP Implementation Project </li></ul><ul><li>Inf...
Case Study Example (Recommendations) <ul><li>Quick Wins – Cost Savings </li></ul><ul><ul><li>Fill open job reqs with curre...
Value Quadrants Easy Complex $ $$$ Savings Implementation Difficulty Leverage Existing Shared Svcs FTE career ladder - com...
FAQ, Why SET?, and Cross Selling
FAQ <ul><li>SET gives me a snapshot in time.  How do I plan for the future? </li></ul><ul><ul><li>If you take into account...
Overcoming Common Objections <ul><li>Not Interested because we’ve already done this type of thing (we just reorganized las...
Why SET? Engagement They Say We Say Optimization Anything from slide 5 We have a data driven methodology that allows you t...
Cross Selling Opportunities Engagement We Say (after SET) Process Improvement We noticed that there are some opportunities...
Meeting Close <ul><li>Questions </li></ul><ul><li>Positives / Deltas </li></ul><ul><li>Next Steps </li></ul>
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Transcript of "Strategic Enterprise Transformation"

  1. 1. Strategic Enterprise Transformation (SET) Business Development Training Bill Chan [email_address] January 2011
  2. 2. Definitions & Buzz Words
  3. 3. Definitions & Buzz Words <ul><li>MSA – Master Services Agreement </li></ul><ul><li>SOW – Statement of Work </li></ul><ul><li>SLA – Service Level Agreement </li></ul><ul><li>Strategic – Important or expertise is essential to maintaining competitive position </li></ul><ul><li>Non-Strategic – Expertise is not essential to maintaining a competitive position (although perhaps important for optimal operations) </li></ul><ul><li>Commodity – Service is that is readily available on the open market </li></ul><ul><li>Outsourcing – Subcontracting work to another business </li></ul><ul><li>Managed Service – Type of Outsourcing Agreement where companies purchase well-defined, SLA-based services to be provided for a fixed fee; such IT contracts often involve agreements with service companies operating in India or elsewhere offshore </li></ul>
  4. 4. Definitions & Buzz Words (p2) <ul><li>Role – Function or activity performed as part of a job </li></ul><ul><li>Job Family – HR title or identifying name given a category of resources performing a particular set of functions </li></ul><ul><li>Resource – Staff, Contractor, or Consultant </li></ul><ul><li>FTE – Full Time Equivalent, typically 2080 hours/yr, and often referring to “in-house” employees </li></ul><ul><li>Staff – Employee </li></ul><ul><li>Contractor – Time and Materials Temporary Staff </li></ul><ul><li>Consultant – Fixed Price Strategic Temporary Staff </li></ul><ul><li>Co-Employment – Contractors who have a potential legal claim to employee status </li></ul>
  5. 5. Context
  6. 6. Essential IT <ul><li>Role of IT </li></ul><ul><ul><li>Efficiently deliver the products and services needed to enable business success while effectively mitigating business and regulatory risks </li></ul></ul><ul><li>Organization </li></ul><ul><ul><li>Is the organizational structure properly aligned in terms of reporting relationships, responsibilities, authority and internal control? </li></ul></ul><ul><li>People </li></ul><ul><ul><li>Is the organization properly staffed (types of skill and number of personnel)? </li></ul></ul><ul><li>Process </li></ul><ul><ul><li>Are processes correct (efficient and effective), documented, and monitored? </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Are the right technologies being leveraged? </li></ul></ul>
  7. 7. Services Overview (Full) <ul><li>Organization </li></ul><ul><ul><li>Organizational Change Management </li></ul></ul><ul><li>People </li></ul><ul><ul><li>Strategic Enterprise Transformation (SET) </li></ul></ul><ul><ul><li>SOW Creation (New) & Review (Existing) </li></ul></ul><ul><ul><li>Offshore Vendor Management Governance </li></ul></ul><ul><ul><li>Offshore Vendor Management Manager Training </li></ul></ul><ul><li>Processes </li></ul><ul><ul><li>Definition / Design / Documentation </li></ul></ul><ul><ul><li>Improvement </li></ul></ul><ul><ul><li>Normalization </li></ul></ul><ul><ul><li>LEAN/Six Sigma </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Out of Scope </li></ul></ul>
  8. 8. Framing the Problem
  9. 9. Common “People Problems” We have co-employment issues with our contractors We can’t afford to lose our contractors – they have too much strategic knowledge We don’t know how to move our employees up the value chain I have to increase my staff but I’m not sure which skills to hire I’m not sure we’re getting the value we should from outsourcing How do my current staff fit my growth plans? We have employees that have retired in place I’m don’t know if my staff is fully utilized My costly resources spend time on lower skilled tasks I’m considering outsourcing but don't know where to start I spend too much time justifying headcount “ HR will take care of it for me” I have to deliver more in 2011 with 2010's workforce “ HR will take care of it for me” My CFO says to &quot;cut all contractors” “ HR will take care of it for me”
  10. 10. Potential Causes of “People Problems” <ul><li>Reactionary staff management </li></ul><ul><li>Lack of transparency into what staff do </li></ul><ul><li>Firefighting </li></ul><ul><li>Department maturity </li></ul><ul><li>Lack of strategic alignment between IT and Business </li></ul><ul><li>It’s the “Elephant in the room” that IT management is often not trained to address – and just as often, don’t want to </li></ul>
  11. 11. Enterprise Current State <ul><li>How did we get here? </li></ul><ul><li>Increase Effectiveness </li></ul><ul><ul><li>Align IT with the Business </li></ul></ul><ul><ul><ul><li>Tactical Execution </li></ul></ul></ul><ul><ul><ul><li>Investment Portfolio Support </li></ul></ul></ul><ul><ul><li>Economies of Scale </li></ul></ul><ul><ul><ul><li>Operational Efficiencies </li></ul></ul></ul><ul><li>Merger or Acquisition </li></ul><ul><ul><li>Reduce redundant functions </li></ul></ul><ul><ul><ul><li>Operational Efficiencies </li></ul></ul></ul><ul><li>Business Changes </li></ul><ul><ul><li>Impactive revenue increases / decreases </li></ul></ul><ul><ul><li>Regulatory </li></ul></ul><ul><ul><li>Business Strategy </li></ul></ul><ul><ul><li>Leadership Changes </li></ul></ul><ul><li>Organically </li></ul>
  12. 12. Enterprise Transformation Drivers <ul><li>Growth – Need more People </li></ul><ul><li>Efficiency – Do more with the same (or less) </li></ul><ul><li>Effectiveness – Something’s not working as good as it can be </li></ul><ul><li>Cost Containment – Reduce People cost </li></ul>
  13. 13. Ready, SET, Go
  14. 14. People Value Curve – Efficiency & Growth Business Value IT People Cost Current Leading Practice Potential
  15. 15. Optimized Staffing Workload Utilization Staffing
  16. 16. Strategic Enterprise Transformation (SET) <ul><li>A data driven methodology that enables management to: </li></ul><ul><li>Optimize resource utilization, </li></ul><ul><li>Define and efficiently fill strategic, non-strategic, and commodity roles, </li></ul><ul><li>Have crisp and clear career plans for key staff, and </li></ul><ul><li>Minimize contractor risk (knowledge retention & co-employment). </li></ul><ul><li>“ Our Strategic Enterprise Transformation services generate recurring savings of between 5% and 25%, which for a 50 person IT shop equals between ¼ and 1 ½ million dollars annually. We’re so confident it can work for you that if we don’t identify at least 5% savings, you don’t have to pay us. </li></ul><ul><li>  </li></ul><ul><li>This methodology – called SET for short – is proven, efficient and repeatable. It improves staff utilization, minimizes contractor risk, and maintains strategically important skills in-house. </li></ul><ul><li>  </li></ul><ul><li>That can help you improve performance and profitability whether you are growing, trying to cut costs, or simply want to be more efficient. ” </li></ul>
  17. 17. What We Deliver <ul><li>Developing Guiding Principles assistance </li></ul><ul><li>Employee and Management Communication Plan assistance </li></ul><ul><li>Detailed analysis of resource roles </li></ul><ul><ul><li>Utilization of resources – what roles are required by which projects & efforts </li></ul></ul><ul><ul><li>Identification of potential “Shared Services” Opportunities </li></ul></ul><ul><ul><li>Quantification of the contractor risk </li></ul></ul><ul><ul><li>Transparency into “Keep the lights on” vs. Investment spend </li></ul></ul><ul><li>“ Quick Wins” recommendations </li></ul><ul><li>Outsourcing review, considering: </li></ul><ul><ul><li>Strategic versus commodity nature of work </li></ul></ul><ul><ul><li>Severability of work </li></ul></ul><ul><ul><li>Availability of contractors for required skill sets </li></ul></ul><ul><ul><li>Efficiency (and cost) of executing contracts for the work </li></ul></ul><ul><li>Ability to increase maturity of the organization </li></ul><ul><li>Ability to perform “what if” scenarios </li></ul><ul><li>Ability to identify Staff with career development potential </li></ul>
  18. 18. What We Don’t Deliver w/ SET* <ul><li>Execution Plan </li></ul><ul><li>Statements of Work </li></ul><ul><li>Process improvement, optimization or normalization </li></ul><ul><li>Career path planning </li></ul><ul><li>Manager training – manage outsourcing </li></ul><ul><li>IT Strategy / Business Strategy Alignment </li></ul>* All or portions of these Services are available in subsequent phases of work
  19. 19. Methodology
  20. 20. How we do it <ul><li>Leverage an Efficient, Proven & Repeatable Methodology </li></ul><ul><ul><li>Define Scope & Create Project Team </li></ul></ul><ul><ul><li>Create Guiding Principles </li></ul></ul><ul><ul><li>Create and Execute Communication Strategy </li></ul></ul><ul><ul><li>Define Departmental Roles (versus HR Job Families) </li></ul></ul><ul><ul><li>Collect Data / Interviews and Document Review </li></ul></ul><ul><ul><li>Analyze and Assess Data </li></ul></ul><ul><ul><li>Create Options and Recommendations </li></ul></ul><ul><ul><li>Review Findings with Management </li></ul></ul><ul><ul><li>Implement “Quick Win” Recommendations First </li></ul></ul>
  21. 21. Guiding Principles Example <ul><li>Organization </li></ul><ul><ul><li>Consider all staffing options for organizational optimization </li></ul></ul><ul><ul><li>Focus external staffing resources on work that is primarily short-term and/or non-customer-facing, while delivering significant efficiencies </li></ul></ul><ul><li>Management </li></ul><ul><ul><li>Provide training, tools and support to help managers understand their options, make correct staffing decisions and improve skills to manage all staffing resources </li></ul></ul><ul><li>Staff </li></ul><ul><ul><li>Absorb potentially impacted FTEs within IT, where possible </li></ul></ul><ul><li>Skills </li></ul><ul><ul><li>Replace contractors in strategic roles with FTEs </li></ul></ul><ul><ul><li>Maintain necessary core competency / institutional knowledge in-house </li></ul></ul><ul><li>Processes </li></ul><ul><ul><li>Normalize like processes across functional areas </li></ul></ul><ul><li>Location </li></ul><ul><ul><li>Backfill open positions in lower-cost areas where there are skilled IT talent to reduce the inherent cost structure </li></ul></ul>
  22. 22. Staffing Optimization Model Example Strategic Importance Degree of Business Collaboration Non-Strategic, Commodity Flexible Workforce Strategic Workforce DC Operators NOC Operators Help Desk Infrastructure Installers DB Designers Lead Engineers Infrastructure Designers System Administrators Production Control DB Administrators Project Managers Security Specialists Infrastructure Solution Consultant High Collaboration Medium Collaboration Low Collaboration Constant collaboration, especially face-to-face required with business; collocation desired Frequent virtual collaboration, some face-to-face Frequent virtual collaboration with minimal face-to-face Defines Business Strategic Strategic Project Dependent Defines business and supporting IT strategy / architecture Influences Business Strategic Project Dependent Market Sourced Services Contributes to realizing IT strategy and may possess substantial institutional or proprietary knowledge Implements Business Solns Project Dependent Market Sourced Services Market Sourced Services Execute the defined solution Strategic – Should Not Outsource Project Dependent - Some Outsourcing Possible Market Sourced Services - Candidate for Outsourcing
  23. 23. Role Data Example <ul><li>Pat – Infrastructure Engineer </li></ul><ul><li>SAP Implementation Project </li></ul><ul><li>Infrastructure Upgrades </li></ul><ul><li>Production Support </li></ul>Role Action Utilization Core Customer Facing Business Analyst SAP Requirements Gathering 15% No Yes – 100% Project Manager SAP 10% No Yes – 50% Engineer SAP Infrastructure Design 25% No No Project Manager Infrastructure Upgrades 10% Yes No Engineer Infrastructure Upgrades Design 20% Yes No Help Desk Lvl 1 Production Support 10% Yes Yes – 100% Engineer Lvl 2 & 3 Production Support 10% Yes Yes – 25% Help Desk 10% Business Analyst 15% Project Manager 20% Engineer 55%
  24. 24. Case Study Example (Recommendations) <ul><li>Quick Wins – Cost Savings </li></ul><ul><ul><li>Fill open job reqs with current employee available bandwidth (easy) </li></ul></ul><ul><ul><li>Replace contractors with employee available bandwidth (easy) </li></ul></ul><ul><li>Retrain/Reskill </li></ul><ul><ul><li>Create FTE career ladder from commodity to strategic roles (easy - HR) </li></ul></ul><ul><li>Address Identified Risks </li></ul><ul><ul><li>Transition knowledge from SME contractors to employees (medium) </li></ul></ul><ul><li>Commodity Functions </li></ul><ul><ul><li>Leverage other departments’ commodity functions, e.g., Help Desk (easy) </li></ul></ul><ul><ul><li>Outsource commodity functions (complex) </li></ul></ul><ul><li>Build Departmental Shared Services </li></ul><ul><ul><li>Hire Dedicated Project Manager(s) or Business Analyst(s) or… (medium) </li></ul></ul><ul><ul><li>Create Help Desk (medium) </li></ul></ul><ul><li>ROI example </li></ul><ul><ul><li>For a 50 FTE dept, 5% savings produce about $250,000 year-over-year savings. 25% savings would translate to $1.5 million in annual savings (assume $140k for a fully loaded FTE) </li></ul></ul>
  25. 25. Value Quadrants Easy Complex $ $$$ Savings Implementation Difficulty Leverage Existing Shared Svcs FTE career ladder - commodity to strategic Fill Open Reqs w/ FTE Replace Contractors w/ FTE Outsource Commodity Functions Hire Specific Skills needed (lower skilled) Transition Contractor SME to FTE Hire Specific Skills needed (highly skilled)
  26. 26. FAQ, Why SET?, and Cross Selling
  27. 27. FAQ <ul><li>SET gives me a snapshot in time. How do I plan for the future? </li></ul><ul><ul><li>If you take into account your IT strategy with your 1 and 3 (or 5) year plans, we can help you build “To-Be” cases so that you can discover potential gaps. Once gaps are identified, we can help build roadmaps to ensure you have the right skills and roles when you need them. </li></ul></ul><ul><li>Won’t this effort rattle my staff? </li></ul><ul><ul><li>We have experience building messaging platforms and conducting data gathering in a manner that explain the effort in a non-threatening and transparent manner. Among other things, from your staff’s perspective, we’re able to finally fix the problems of, “Why do the contractors get all the cool work?” or “Where is my career path in this company?” </li></ul></ul><ul><li>Why can’t I do this myself? </li></ul><ul><ul><li>You can. However, we have spent years refining the methodology, and have proprietary analytics that we apply to create our recommendations. Our methodology allows us to “get in and get out” with a minimum amount of disruption and return maximum value in a short period of time. We’ve also found that an independent assessment yields better and truer results. </li></ul></ul>
  28. 28. Overcoming Common Objections <ul><li>Not Interested because we’ve already done this type of thing (we just reorganized last year) </li></ul><ul><ul><li>You undoubtedly have some best practices going – we’re offering to show you how to go even further </li></ul></ul><ul><li>This will just upset everyone – they’ll think we’re contracting out the whole shop </li></ul><ul><ul><li>We’ll show you how to build guiding principles which can protect your staff, improve their job satisfaction, and still provide savings. Most importantly, we can provide you with communication/messaging templates to assuage doubts and concerns </li></ul></ul><ul><li>We’re cutting budgets right now, not hiring more consultants for ‘studies’ </li></ul><ul><ul><li>That makes now the perfect time for this – and if we don’t save you money, you don’t have to pay. </li></ul></ul><ul><li>We don’t have time for this </li></ul><ul><ul><li>Our approach can designed to minimize disruption and requires only 1 – 2 hours of time from each of your managers. For greater savings, we’d ask for similar effort from your key workers too. </li></ul></ul><ul><li>We’ve never heard of you / don’t know you / you’re too small </li></ul><ul><ul><li>We’ve done these transformations for a variety of companies – from Fortune 100 firms to much smaller organizations. We know we can help you, which is why we guarantee our work. </li></ul></ul><ul><li>You don’t understand our problems / we’re unique and you don’t know us </li></ul><ul><ul><li>Our consultants have decades of experience working with a large variety of ‘unique’ companies. Our analysis incorporates each company’s special needs and circumstances. </li></ul></ul>
  29. 29. Why SET? Engagement They Say We Say Optimization Anything from slide 5 We have a data driven methodology that allows you to optimize your staff utilization, reduce your contractor risk, and identify clear career paths for your staff. We anticipate a 5% to 20% efficiency savings, which translates into 2 to 8 FTE in a 40 person department. M&A We’re going through a (merger / acquisition) We can perform independent due diligence on the staff profile and give you what roles are currently required, where they’re required, and where they may be opportunities to leverage economies of scale within the merged organization. This is a great opportunity to gather the data you need to make data-driven decisions. New Leadership I’m in my first 100 days trying to understand my new org We can quickly give you an independent detailed readout with full transparency into what roles are working on which efforts. This is a great opportunity to gather the data you need to make data-driven decisions. Re-Org We’re going to have a re-org (staff reduction, growth, etc). We can do an assessment that identifies shared services opportunities, outsourcing candidates, and your key strategic personnel (both staff and contractors). This is a great opportunity to gather the data you need to make data-driven decisions.
  30. 30. Cross Selling Opportunities Engagement We Say (after SET) Process Improvement We noticed that there are some opportunities to (improve, strengthen, normalize, consolidate) some of your core processes. We have expertise in LEAN/Six Sigma and can help drive more efficiency and help raise your level of your process maturity. IT Governance We noticed that you could really benefit from having a more formal IT governance. We have experience in building out an IT governance framework that helps you deliver your IT strategy. IT Strategy We noticed that there’s very little information on your future planning. We can help align your IT strategy to your business strategy and build out your future roadmaps. SOW Review If you have doubts that your suppliers are performing up to your agreement, we can review your SOWs and show you how to leverage provisions in the contract to better manage your suppliers. SOW Creation During our assessment, we found some potential areas for outsourcing. We’re skilled in creating SOWs that benefit both you and the supplier, and we know how to create the supporting artifacts, such as process maps, SLAs, KPIs, workload, etc. Outsource Governance Most departments aren’t set up to govern to SOWs and SLAs. We can help you build the governance needed to maximize the value that you signed up for in your SOW, and how to use (penalties/credits) to make sure the supplier performs to their contractual obligations.
  31. 31. Meeting Close <ul><li>Questions </li></ul><ul><li>Positives / Deltas </li></ul><ul><li>Next Steps </li></ul>

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