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Cxo Advisor customer value proposition 2013 update


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We drive business innovation through IT transformation

Three Strategic Questions :

Is your business suffering from legacy induced inertia?
Is your business keeping up with and responding to market changes?
Are you disruptive in the market?

Our Core Capabilities Include :

Advise -

Accelerated advisory and governance oversight backed by Ovum in Africa
Apply the 3RM budget process for business clarification (What to tell the board about your IT budget)
Free up "legacy" budget for business innovation
Transform your business model for business innovation with
Innovate -

Agile business change and innovation is possible with the Outsystems Agile Platform
Apply Agile Business Innovation methods to empower business, accelerate change
Incorporate Software as a Service (SaaS) solutions into your innovation agenda
​Change -

Apply Agile Governance and delivery assurance
Discover opportunities to free up legacy, create a blueprint for IT transformation
Use Business Process as a Service (BPaaS) alternatives to accelerate change

Published in: Business, Technology
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Cxo Advisor customer value proposition 2013 update

  1. 1. CXO AdvisorAdvise – Innovate – Change
  2. 2. Three strategic questionsWe will save you 20 – 30 % of your IT cost over 3 – 5 years…
  3. 3. We do 3 things : -Advise Deeply experienced team Backed by Ovum in Africa – IT Finance strength Business – IT Transformation ModelInnovate Return on Business Agility Rapid Innovation with Outsystems Business Model Innovation – Saas-it.netChange Liberate legacy - Adaptivity Business Process as a Service – Procurement, IT Finance, Portfolio Governance as a Service
  4. 4. MaintenanceInnovationWhy “as a Service” for innovationInternalSystemsHardwareMiddlewareApplicationBusinessProcessScope of Activities IT budget/Effort≈HardwareMiddlewareApplicationBusinessProcessScope of Activities IT budget/EffortInnovationInternallyManagedIaaS&HaaSMaintenanceVendorManagementInnovationInternallyManagedPaaS&IaaS&HaaSMaintenanceVendorManagementInnovationInternallyManagedSaaS&PaaS&IaaS&HaaSMaintenanceVendorManagement≈BPaaS&SaaS&PaaS&IaaS&HaaSLiberate your legacy…
  5. 5. SHARED SERVICES MODEL SOURCESPorters Value Chain – Michael Porter – Harvard Business SchoolWhat Business Really Wants from IT – Terry WhiteReinventing the IT department – Terry WhiteSpeed up the mess – Terry White
  6. 6. What IT really does – Terry WhiteIT without fuss76%Improvebusinessresults22%Informationleadership2%TechnologydeliveryIT without fuss20%Improvebusinessresults60%Informationleadership20%What theCEO wants… Agile Business - IT Transformation
  7. 7. How we see the world: The three ‘roles’ in businessShared andsupportservicesCore businessStrategyLeadershipInnovationGiven Porter’s value chain, there are three ‘roles’ of business Core business (not systems) Shared services / business and customer support Strategy, leadership, innovation – the ‘glue’ that holds it all together
  8. 8. Whatshould wedo?Howshould wedo it?Getting itdone!StrategyLeadershipInnovationProvide the glue:“How do we serviceour customers?”YourCustomerOne goldenthreadSalesrevenue vs.costHow we see the world: There is only one “C”CorebusinessThe people who pay for your products and services The people who use your services again and, refer others to you and, have choices and ultimatelypay your salaryThe Customer needs cross functional, organisation wide alignmentGainCustomers(Sales &marketing)ProcessordersManufacture /DeliverservicesDistributeCollectPaymentShared andsupportservicesFinance and AdministrationHuman ResourcesInformation TechnologySupply ChainLegal & GovernanceSupport the corebusiness in servingcustomers
  9. 9. How we see the world: Business momentumBased on your rate of sales / against your cost burn rate Sales Costs Geography Staff LegacyAll of these have their own cycle times Decisions which ignore cycle times tend to failShared andsupportservices Core businessStrategyLeadershipInnovationBusinessmomentumCurrent sales rate/cost burnThe business engine
  10. 10. The business drivers of agilityShared andsupport services Core businessStrategyLeadershipInnovationBusiness momentumDeliverFixImproveServiceDifferentiateCorebusinessengineValuedeliveryengineSupportengineLooming ThreatChange StrategyChangeEnvironmentNew products,markets, channelsNew, improvedprocessesService businessgrowthRegulation,mandatesNew CxO, valuepropositionsFix support engineTraining, upgradesNew, improvedprocessesCloud, outsource, BPaas
  11. 11. Shared andsupport services Core businessStrategyLeadershipInnovationBusiness momentumDeliverFixImproveServiceDifferentiateSustainabilityRiskStrategic RiskTactical RiskUncertaintyOperationalRiskBTL activity drives costATL activity drives revenueAre we doing the right things?
  12. 12. Shared andsupport services Core businessStrategyLeadershipInnovationBusiness momentumDeliverFixImproveServiceDifferentiateRiskCostPoASustainabilityRiskRiskCost efficiencyTimeRiskNPV/TimeBTL- PBPCVAPBPCVAPoAStrategic RiskROI = Breakeven?Benefits realisationBaselineROI > IRRROI = IRR + >40%**Hit rate >70%PoATime < 2yrsHit rate > 50%PoAHorizon 1-3 yrsHit rate > 30%PoAHorizon – 1-20 yrsTactical RiskUncertaintyHistorical CVAOngoing BenefitsTCOCurrent CVAOngoing BenefitsCurrent PerformancePlanned CVAPlanned BenefitsPlanned PerformanceRisk ToleranceOperationalRiskCan we measure them?
  13. 13. Financial Cost viewShared andsupport services Core businessStrategyLeadershipInnovationBusiness momentumDeliverFixImproveServiceDifferentiateSustainabilityRiskStrategic RiskTactical RiskUncertaintyOperationalRiskTypically total fixed costTypically Capex or New Services ContractTypically total variable cost
  14. 14. Financial Performance viewShared andsupport services Core businessStrategyLeadershipInnovationBusiness momentumDeliverFixImproveServiceDifferentiateSustainabilityRiskStrategic RiskTactical RiskUncertaintyOperationalRisk Cost of salesProduction CostsReturn on Capital Employed / ROASales / Total RevenueNet cash flow / working capitalCash Value added
  15. 15. The 3RM is used at every stage15FormulateStrategyStrategicPlanPrioritiseplannedInitiativesResourceplannedInitiativesExecute andtrackRun theBusinessStrategicinputsInnovationResearch & AdvisoryTrendsBusiness strategic inputsWhere do we want to be?Whats important?Are we achieving what we should be?
  16. 16. APPROACHChange at the speed of Business
  17. 17. Cost / savings flow17 CXO Advisor © Client distribution onlyRun the engineBudgetITWF IBR ILStrengthenITStrengthenEngine Meaning AttentionResults in change ofmomentum line costsMomentum line
  18. 18. Todays decisions drive subsequent spend profiles18 CXO Advisor © Client distribution onlyEach 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 inyear 3MomentumlineMomentum lineMomentumlineYear 1Year 3Year 2
  19. 19. Comparisons can be revealing19 CXO Advisor © Client distribution only• Portfolio to budget Y0• Year to year• Between divisions• Between countries• Between organisationsOrganisation 1Organisation 2Both spend the same…Which is better according to thisbenchmark?
  20. 20. CXOA D V I S O RRight of Way TM – Portfolio PrioritisationPrioritisationpain points• How do youcompare apples withmonkeys?• Noise & politicsdefine priorities?• What aboutregulatorycomplianceprojects?• Everything MUSThave a positive ROI• Are your initiativesaligned with yourstrategy?• What about the realvalue from theinitiative?• How dodependencies playout in prioritisation?• What about marginalprojects, that justmust be done?• What aboutinnovation – how doyou put a value to it?Right of Way TMbenefits• Fixes theprioritisationproblem• Prioriisation alignedwith your strategicobjectives• Rigourous & fairprioritisation• ROI is not the onlycriterion – focus onvalue to yourorganisation• Has the rightdiscussion aroundproject right of way• What should wedo, & why?• What should wedelay & why?• What value willwe derive?• Develops scenariosaround differentpriorities• What benefits willwe focus on?• Clarifiesunderstanding!The steps to portfolio prioritisation successUsing the Right of WayT M processes & toolsDecide on utility factors fromstrategic intentWeight 3RM classes utility,according to investmentpolicy1 3 3 3 53 0 9 2 44 5 1 4 6Fast, profitable,innovative,customer focusedProject 1Project 2Project 312 3Classify projects & define utilitycontribution per projectProioritiseprojects bystrategicallyaligned utilityscoresProject 1Project 2Project 3955674Project1Project3Project2Project …Project …Step 5Step 3Step 4Step 1 Step 2Score projects bycontribution,utility & class95DotheseDon’t dothese
  21. 21. CXOA D V I S O RPerformancepain pointsBenchmarkingbenefitsPerformance and cost benchmarking• Our legacy is drainingour budget• Maintenance uses upto 80% of ourresources• The drivers of our costare unclear• We have too muchinertia andbureaucracy• We are unable toinnovate internally• We seem to keepdigging the same hole• The balancedscorecard doesnt tellus if we’re missingsomething – it tends tobe a lag indicator ofperformance• Follows 80/20 rule –focus on importantperformance issues• De-politicisesperformance• Clear definition oflead/lag drivers andappropriate responseto each• Extract value fromcurrent processes /systems• All measures within3RM paradigm –aligned to businessstrategy, resourcing,communicationmodelsThe steps in indexing, base-liningand benchmarkingUnderstand lead / lag measures, focusareas, levers of performance and indexthemStep 2Benchmark only where focus will produceresultsStep 3Know what the definition ofperformance is for each businessdriverStep 1Execute value realisation plansStep 4LegacyvalueCorevalueunlock
  22. 22. 3RM© - ROA engagement model22 CXO Advisor © Client distribution onlyBaseline current agility &innovationAnalysedrivers, resources andplanShow agile improvementopportunitiesDevelop continuousinnovation roadmap
  23. 23. Our PrincipalsTransactionAdvisoryBusinessimprovementIT FinancialManagementIT BusinessAlignmentCIO and FinancialIndustryexprienceExpert in CloudenablementCloud businessmodelsCloud marketdynamicsVendortransformationEx-CIO/CTO of 20000 strong ICTcompanyWorldwiderecognition ofICTmanagementthinkingExpert in ITFinanceAuthor of threebooks on ITmanagementWorked with IVIdevelopingmaturityframeworks forIT ValueSaaS-it advisesMicrosoft, Nokiaand others onCloud go-to-marketpropositionsDeepexperience inTelecoms andICTProfoundinsights intocustomerfocusedstrategiesExtensiveexperienceMergers,Acquisitions andoperationalrestructuresHeld executivepositions forglobalInformationTechnology andTelecommunications companies.Established CXOAdvisorCraig Terblanche Gerhardt van Wyngaardt Kim Andersen Terry White Anders Trolle-Schultz
  24. 24. Our partnersAdvise CXO Advisor is backed by Ovum in AfricaInnovate CXO Advisor is an OutPartnerChange CXO Advisor is a reseller and consulting partner
  25. 25. THANK