2016 cxo outsystems jvp 4.5

1. Copyright CXO Advisor & OutSystems South Africa 2016

2. Copyright CXO Advisor & OutSystems South Africa 20162 Strategic Functional HighStrategic Impact Tactical Support High Low OperationalImpact Placement Assurance One on one Advisory Questions & Answers Resourcing Interim Management Contract Assurance Transformation Advisory Performance Optimiser Strategy & Programme Advisory Procurement & Transaction Advisory Outsourcing Advisory Merger, Acquisition, Competition & Growth Advisory Risk Advisory Go to Market Positioning Ad v is o r y le d I n n o vatio n & s t r a te gy a c t ivatio n Governance Bid Advisory Enterprise Development Risk Assurance Apps Programme Assurance Assessments Portfolio Prioritisation Legacy Modernisartion Agile Business Skills development Trends Expert Opinion Minimal viable product Outsourcing Assurance

3. Copyright CXO Advisor & OutSystems South Africa 2016 Agile Business - IT Transformation

4. Copyright CXO Advisor & OutSystems South Africa 2016 IT without fuss 76% Improve business results 22% Information leadership 2% Technology delivery IT without fuss 20% Improve business results 60% Information leadership 20% What the CEO wants What IT really does – Terry White

5. Copyright CXO Advisor & OutSystems South Africa 2016 Maintenance Innovation Managed internally Hardware Middleware Application Business Process Scope of Activities IT budget/Effort ≈ Hardware Middleware Application Business Process Scope of Activities IT budget/Effort Innovation Internally Managed IaaS & HaaS Maintenance Vendor Management Innovation Internally Managed PaaS & IaaS & HaaS Maintenance Vendor Management Innovation Internally Managed SaaS & PaaS & IaaS & HaaS Maintenance Vendor Management ≈

6. Copyright CXO Advisor & OutSystems South Africa 2016 and the questions you need to ask What’s our sourcing strategy and what deal principles support this? Are we getting the best fit solution at the best value? Can the vendor deliver on their promises and demonstrate their capabilites in good faith? Can we achieve a win-win contract that is sustainable? Strategic Intent – Program Rationale Requirements Specification Request for Solutions Solution Evaluation Vendor selection and due diligence Contracting and delivery assurance What are our market and product options?

7. Copyright CXO Advisor & OutSystems South Africa 2016 Benchmark IT spend to business efficiency 7 0% 5% 10% 15% 25% 40% 50% 60% 70% 80% Cost / Income Ratio IT/OperatingCost Unexploited business efficiency potentialEfficient IT / Efficient business Inefficient IT / Inefficient businessEnabling increased business efficiency (Median 11- 59.1%, 12– 59.3%, 13 – 58.3%) (Median 11- 8.2%, 12– 12%, 13 – 12.9%) 20% Company A Company B Company C Company D Based on Butler Group IT efficiency benchmark model

8. Copyright CXO Advisor & OutSystems South Africa 20168  The model abstracts the complexity of IT Management so that the IT agenda is driven by business requirements of IT.  In support of this the Model applies to:  These are management and commercial services that enhance business capability to leverage the value of technology.

9. Copyright CXO Advisor & OutSystems South Africa 2016 CONSUMPTION MODEL VISION Porters Value Chain – Michael Porter – Harvard Business School What Business Really Wants from IT – Terry White Reinventing the IT department – Terry White Speed up the mess – Terry White

10. Copyright CXO Advisor & OutSystems South Africa 2016 Shared and support services Core business Strategy Leadership Innovation • Porter’s value chain maps to the three ‘roles’ of business Drive each Role differently Strategy / Leadership / Innovation Inbound logistics Operations Service Outbound logistics Marketing & sales Human resources Finance & Admin IT Supply Chain Firm infrastructure

11. Copyright CXO Advisor & OutSystems South Africa 2016 • Baseline - rate of sales / against your cost burn rate • All of these have their own cycle times Shared and support services Core business Strategy Leadership Innovation Business momentum Current sales rate / cost burn The business engine

12. Copyright CXO Advisor & OutSystems South Africa 2016 Shared and support services Core business Strategy Leadership Innovation Business momentum Deliver Core business engine Value delivery engine Support engine FixRegulation, mandates New CxO, value propositionsFix support engine ServiceLooming ThreatService business growthTraining, upgrades ImproveChange the strategy New, improved processes New, improved processes Differentiate Change the environment New products, markets, channels Cloud, outsource, BPaas

13. Copyright CXO Advisor & OutSystems South Africa 2016 Shared and support services Core business Strategy Leadership Innovation Business momentum Deliver Fix Service Improve Differentiate Sustainability Risk Strategic Risk Tactical Risk Uncertainty Operational Risk BTL activity drives cost ATL activity drives revenue

14. Copyright CXO Advisor & OutSystems South Africa 2016 Shared and support services Core business Strategy Leadership Innovation Business momentum ServiceRisk NPV/Time ROI = Breakeven? Benefits realisation Baseline Hit rate >70% Real Options Analysis Time < 2yrs ImproveBTL- PBP CVA ROI > IRR Hit rate > 50% PoA Horizon 1-3 yrs Differentiate PBP CVA PoA ROI = IRR + >40% ** Hit rate > 30% PoA Horizon – 1-20 yrs Deliver Historical CVA Ongoing Benefits TCO Current CVA Ongoing Benefits Current Performance Planned CVA Planned Benefits Planned Performance Fix Risk Cost PoA Risk Cost efficiency Time Risk Tolerance Sustainability Risk Strategic Risk Tactical Risk Uncertainty Operational Risk

15. 15 Each subsequent period shows the effects of activities from the previous period • High spend in IBR in year 1 results in higher Ops engine costs in year 2 • High spend in “Strengthen the engine” in year 2 should result in lower Ops engine costs in year 3 Year 1 Year 3 Year 2

16. Copyright CXO Advisor & OutSystems South Africa 201616  Portfolio to budget Y0  Year to year  Between divisions  Between countries  Between organisations  Between Products Both spend the same…  Which plans better ?  Which is more sustainable?  Which is more strategic? Shared and support services - 81% Core business – 19% Strategy Leadership Innovation – 0% Organisation 1 2 % 8 % 67 % 14 % 2 % 3 % 67% - Deliver 13% - Fix 17% - Service 3% - Improve 0% - Differentiate Organisation 2 1 % 3 % Shared and support services Strategy Leadership Innovation 3% - Differentiate 2 % 1 % Core business 3 % 1 % 67 % 12% 3 % 1 % 67% - Deliver 2% - Fix 10% - Service 18% - Improve2 % 1 % 2 % 2% 2 % 1 %

17. Copyright CXO Advisor & OutSystems South Africa 201617 Shared and support services - 81% Core business – 19% Strategy Leadership Innovation – 0% Organisation 1 2 % 8 % 67 % 14 % 2 % 3 % 67% - Deliver 13% - Fix 17% - Service 3% - Improve 0% - Differentiate 1 % 3 % Model 1 Model 2 Bureaucracy Index X/Y 34% 26% Innovation Index ∑SLI:D 0% 12% Inertia Index 1-A/B 91% 73% Growth index C/D 2% 16% Focus index ∑F/100 27% 36% X Y Bureaucracy Inertia A B Focus F Innovation ∑ Growth C D

18. Copyright CXO Advisor & OutSystems South Africa 201618 Prioritisation pain points • How do you compare apples with monkeys? • Noise & politics define priorities? • What about regulatory compliance projects? • Everything MUST have a positive ROI • Are your initiatives aligned with your strategy? • What about the real value from the initiative? • How do dependencies play out in prioritisation? • What about marginal projects, that just must be done? • What about innovation – how do you put a value to it? Right of Way TM benefits • Fixes the prioritisation problem • Prioritisation aligned with your strategic objectives • Rigorous & fair prioritisation • ROI is not the only criterion – focus on value to your organisation • Has the right discussion around project right of way • What should we do, & why? • What should we delay & why? • What value will we derive? • Develops scenarios around different priorities • What benefits will we focus on? • Clarifies understanding! Decide on utility factors from strategic intent Weight 3RM classes utility, according to investment policy 1 3 3 3 5 3 0 9 2 4 4 5 1 4 6 Fast, profitable, innovative, customer focused Project 1 Project 2 Project 3 1 2 3 Classify projects & define utility contribution per project Prioriitise projects by strategically aligned utility scores Project 1 Project 2 Project 3 95 56 74 Project1 Project3 Project 2 Project … Project … Step 5 Step 3 Step 4 Step 1 Step 2 Score projects by contribution, utility & class 95 Do these Don’t do these

19. Copyright CXO Advisor & OutSystems South Africa 2016  Transaction, Program and Board Advisory  Innovation & strategy activation  IT Costs and Value Measures and Benchmarks  Business Agility through IT transformation  IT Value and Benefits Realisation 19

20. Copyright CXO Advisor & OutSystems South Africa 2016 panel Craig Terblanche Craig is an IT Management Consultant with extensive experience in IT re-alignment assignments during Mergers, Acquisitions and operational restructures. Craig has also undertaken interim management assignments in executive positions in global IT and Telecommunications companies. Terry White Terry’s strategic expertise in IT is recognized worldwide: “Terry White is one of the most original thinkers in IT to surface in recent years. He was one of the first IT gurus to identify the need for IT departments to radically transform themselves to accommodate the realities of the twenty-first century”. Professor of IT (UK) Ouen Worth Manage an innovative technology team and be a contributing member of a team that challenges me technically, creatively and personally. Work in an environment where I can exercise and improve my skills to bridge the divide between technical constraints and business goals. Tony Botes Engineer with deep experience in systems, processes and solutions from the shop floor to the top floor. Management consultant in turn around, venture capital, incubation and business growth. Charl Enne A passionate evangelist of business transformation through automation and rapid application deployment, with experience in both business and technology projects across multiple industries. A highly effective communicator with natural business and leadership skills, as well as fast learning capabilities. . Calvin Terblanche Helping organizations build flexible apps for change and innovation. App consulting expertise: - Translating business requirements into technical specifications - App design consulting - Native, web and hybrid apps. Prototyping or building Minimal Viable Products. Alexa Terblanche Keeping the wheels of finanace, admin, sales and marketing support turning with passion and commitment. .