Analyze This - #SPSSac

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We will examine how to create a cost benefit analysis document that clarifies your customer’s problem, explains your intended solution, and details the work required. We will break down costs of the current state and future state compared to forecasted benefits to show payback of the solution over time. This session will guide you through a simple process to help you understand how to calculate and communicate the business value of your SharePoint solutions.

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  • Analyze This - #SPSSac

    1. 1. Analyze This - How to Calculatethe Business Value of SharePoint twitter @davidsamoranski david.samoranski @robbinsgioia.comDavid SamoranskiProduct Manager @davidsamoranski
    2. 2. Session SummaryValue Processes Solutions Analysis @davidsamoranski
    3. 3. VALUE @davidsamoranski
    4. 4. Problems Change Complexity Compliance Consolidation @davidsamoranski
    5. 5. Solutions Forms Services Lync Server SharePoint Excel Services BCS @davidsamoranski
    6. 6. Better Together Pain Value Problems Solutions @davidsamoranski
    7. 7. Improving Processes Ad-hoc Repeatable Managed Optimized @davidsamoranski
    8. 8. Analysis Activities IDENTIFY EXPLORE DESIGN ANALYZE Where can SharePoint Future StateCurrent State Metrics Process Pains help the process? Improvements Manual Which capabilities are 50% Decrease in CycleCycle Time Activities needed? Time Communication What is the effort 65% Decrease in WorkWork Time Inefficiencies required? Time Unnecessary How much will thatCost Process Steps cost? 40% Cost Reduction @davidsamoranski
    9. 9. Identify Current State Who What When Where @davidsamoranski
    10. 10. Explore Pains and Challenges Knowledge Management Communication Visibility @davidsamoranski
    11. 11. Design Solution Alternatives Content Workflow Integration Reporting @davidsamoranski
    12. 12. Analyze Business Value Today Tomorrow Cost Benefit @davidsamoranski
    13. 13. Solution ExamplesCommon business processes that could be improved with SharePoint Solution → Collaborative Automated Project Portfolio Document Performance Records Management Automated Forms Organization ↓ Management Development Reporting Actual Vs. Forecast Standardized Lead Qualifications and Dashboards Customer Assessment Sales Investment Decision Compliance Information Conversions Survey Lead Tracking Making Customer Surveys Marketing Plan Historic Campaign or Customer Satisfaction Marketing Marketing Plan Lead Capture Rates Execution Branding Information Surveys Development Employee Satisfaction Employee Performance Strategic Human Capital EEO Compliance Surveys HR Training Materials Reviews Initiatives Information New Hire Recruiting and Onboarding Billing Information Financial Performance Financial Planning and Online Customer Finance Invoicing Forms Customer Invoicing Reporting Budgeting Invoicing Records Supplier Information Sensitive Records Virtual Project Business Process Operations Discretionary Spending Vendor Data Management Management Office Automation Management New Product Project Performance Customer Data and Product RequirementsProduct Development Milestone Achievement Development Reporting Market Requirements Documentation Project Status System Performance Reporting Vendor Contracts and Self-service Inventory IT Change Request Forms Tracking Managing IT Project Warranty Information System Requests @davidsamoranski
    14. 14. PROCESSES @davidsamoranski
    15. 15. Process Modeling Participants Steps Decisions Metrics @davidsamoranski
    16. 16. Participants Roles Swimlanes @davidsamoranski
    17. 17. Steps Sequence Participants @davidsamoranski
    18. 18. Decisions Approvals Authority @davidsamoranski
    19. 19. Metrics Work Time Cycle Time @davidsamoranski
    20. 20. Problem Identification Template Who is Where does it When does it Why does itID What is the problem? affected? occur? happen? exist?123456789 @davidsamoranski
    21. 21. Process Analysis Template Phase 1 Phase 2 Phase 3 Phase 4PhaseDescriptionStakeholdersProblemsIdentifiedImpact @davidsamoranski
    22. 22. SOLUTIONS @davidsamoranski
    23. 23. Solution Design Brainstorm Define Prioritize Select @davidsamoranski
    24. 24. Solution Identification Template Who is Where does it When does it Why is it anID What is the solution? affected? occur? happen? improvement?123456789 @davidsamoranski
    25. 25. Solution Analysis TemplateID Solution Value Complexity123456789 @davidsamoranski
    26. 26. Detailed Value AnalysisID Solution Urgency Scale Impact Reuse Value123456789 @davidsamoranski
    27. 27. Detailed Complexity AnalysisID Solution Implementation Training Support External Complexity123456789 @davidsamoranski
    28. 28. Prioritization Matrix TemplateHigh 5 Shared calendaring / presence awareness to determine resource availabilityComplexity Searchable employee profiles, skill-sets, and Searchable, collaborative 3 contact information document repository and storage Improved ability to track changes, compare, and integrate document versionsLow 1 Low 1 3 High 5 Value @davidsamoranski
    29. 29. Process Analysis Template Phase 1 Phase 2 Phase 3 Phase 4New PhaseDescriptionStakeholdersImprovementsBenefit @davidsamoranski
    30. 30. Anticipated Benefits Features KPI StakeholdersID Process Phase Improvement Benefits Required Impact Affected123456789 @davidsamoranski
    31. 31. ANALYSIS @davidsamoranski
    32. 32. Communicating Value Cost Benefit Value Return @davidsamoranski
    33. 33. Common Costs ElementsCost Element Cost EquationSoftware Licenses x cost of licenseHardware Hardware components x costPlanning Time IT hours x cost per hourPilot Program Cost of labor, hardware, softwareDevelopment Time Consultant cost + IT hours x cost per hourApp Testing/Remediation IT hours x cost per hourImage Engineering IT hours x cost per hourInstallation Time IT hours x cost per hourEmployee Downtime Install time x cost per hourTraining Training class expense + employee training timeSupport Costs IT hours x cost per hourOngoing Maintenance Desktop & Server costs @davidsamoranski
    34. 34. Cost Analysis TemplateCost Element Item One-Time Cost Recurring CostSoftwareHardwarePlanningInstallationDevelopmentTrainingSupportMaintenance Total @davidsamoranski
    35. 35. The Cost Line Financial Measure Year 0 Year 1 Year 2 Year 3 Total Implementation Costs ($850,000) ($850,000) Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000) Benefits (one-time) $0 Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000 Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000 Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000 Discount Rate 10% Net Present Value (NPV) $1,535,900 NPV per User (1k users) $1,535 Payback (months) 15 Internal Rate of Return (IRR) 53% @davidsamoranski
    36. 36. Benefit EquationsReduced Operating Cost = Improvement in work time per hour X Number of hours annually = Dollars Saved X Fully burdened resource cost/hourIncreased Profit = (Future close rate – current close rate) X Number of Opportunities X Average Revenue per closed sale = Dollars Earned X Gross Margin @davidsamoranski
    37. 37. Benefit Analysis TemplateID Phase Improvement Cost Decrease Revenue Increase Benefit12345678 Total @davidsamoranski
    38. 38. The Benefit Line Financial Measure Year 0 Year 1 Year 2 Year 3 Total Implementation Costs ($850,000) ($850,000) Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000) Benefits (one-time) $0 Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000 Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000 Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000 Discount Rate 10% Net Present Value (NPV) $1,535,900 NPV per User (1k users) $1,535 Payback (months) 15 Internal Rate of Return (IRR) 53% @davidsamoranski
    39. 39. Cost/Benefit Analysis Discount Rate NPV Payback Time IRR @davidsamoranski
    40. 40. The Analysis Line Financial Measure Year 0 Year 1 Year 2 Year 3 Total Implementation Costs ($850,000) ($850,000) Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000) Benefits (one-time) $0 Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000 Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000 Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000 Discount Rate 10% Net Present Value (NPV) $1,535,900 NPV per User (1k users) $1,535 Payback (months) 15 Internal Rate of Return (IRR) 53% @davidsamoranski
    41. 41. QUESTIONS?David Samoranski | @davidsamoranski | (703) 706-4020 david.samoranski@robbinsgioia.com @davidsamoranski
    42. 42. THANK YOU! @davidsamoranski

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