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AE Spot'On - Chris Potts - Enterprise investment: Combining EA and Investment Portfolio Management

The document outlines the principles and practices of enterprise investment, focusing on the challenges and strategies for successfully managing investments in projects. It identifies a significant project failure rate and emphasizes the importance of understanding cultural factors and investment portfolios in achieving business goals. Additionally, it discusses the role of enterprise architecture in supporting investment frameworks and decision-making processes.

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Welcome Johan Merckx Enterprise Architect  1
 2
Enterprise Architecture is about Enterpreneurship and Engineering
@chrisdpotts  7
Enterprise Investment Chris Potts AE, Heverlee 30th January 2014 © Copyright Dominic Barrow Services Limited. All rights reserved.
What I Do Corporate Strategist - Enterprise Investment Working with people around the world helping them to succeed with their strategies and to increase their value, contribution and influence Practitioner & Mentor Speaker & Facilitator Author of The FruITion Trilogy FRUITION RECREATION DEFRICTION © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment: How Are We Doing? 70% of projects fail* *Does that mean 30% of projects succeed? © Copyright Dominic Barrow Services Limited. All rights reserved.
Some Projects Succeed, Some Don’t -$115 million -$150 million -$120 million © Copyright Dominic Barrow Services Limited. All rights reserved. -$101 million
Some Projects Succeed, Some Don’t +$919 million © Copyright Dominic Barrow Services Limited. All rights reserved.
The First Principle of Enterprise Investment Investment is about scenarios and probabilities not certainties Do you agree with this principle? © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment From Information Technology to Enterprise Investment The Value Chain for Enterprise Investment Enterprise Investment Culture The Enterprise Investment Portfolio End-to-End Process, Core Capabilities and Governance © Copyright Dominic Barrow Services Limited. All rights reserved.
From Information Technology to Enterprise Investment © Copyright Dominic Barrow Services Limited. All rights reserved.
At the Heart of Every Strategy… Value People Money Technologies © Copyright Dominic Barrow Services Limited. All rights reserved.
The Four Generations of Corporate Strategy for IT The FruITion Strategy® Fourth Generation Focus: Enterprise Investment Foundation: Portfolio of investments in change Third Generation Focus: IT Exploitation Second Generation IT Efficiency First Generation Technology Return on investments in business change The value people create by exploiting IT Foundation: Investments involving IT Focus: Cost and performance of IT services Foundation: IT spending (core capabilities, projects, services) Focus: Architecture & standards Foundation: IT roadmap © Copyright Dominic Barrow Services Limited. All rights reserved.
The Value Chain for Enterprise Investment © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Achieving your goals for both structure and value as risk-efficiently as possible © Copyright Dominic Barrow Services Limited. All rights reserved.
The Porter Value Chain FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT SUPPORT ACTIVITIES TECHNOLOGY DEVELOPMENT PROCUREMENT INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTICS MARKETING & SALES SERVICE © Michael Porter PRIMARY ACTIVITIES Strategy? Enterprise Architecture? Investment Portfolio Management? Sourcing? © Copyright Dominic Barrow Services Limited. All rights reserved.
The Enterprise Investment Value Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
The Enterprise Investment Value Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
The Enterprise Investment Value Chain “CIO” Enterprise Architecture Strategy Enterprise Investment Value Structure “CTO” Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
Enterprise Investment – Measures of Success Enterprise Architecture Investments Management Achievement of agreed design characteristics Success of structural investments Influence on people’s strategies & plans Impact on portfolio productivity & efficiency Impact on time-to-first benefit in projects Achievement of agreed investment goals Percentage investment by value type Portfolio costs to P&L Each project: value milestones achieved Contribution of ‘exploitation projects’ Sourcing Supplier delivery to SLAs and Project Milestones Costs to cash versus budgets Business impacts of service disruptions Supplier added value (over & above contract) Mitigation of supply risks to agreed residual values © Copyright Dominic Barrow Services Limited. All rights reserved.
Investing in Stability, Investing in Change Strategy Enterprise Investment Goals Agents of Stability Invest in Stability Invest in Change Stability Change Operations Agents of Change Projects Predictabilities Probabilities Outcomes © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment – Investing in Stability and Change Achieving your goals for both structure and value as risk-efficiently as possible Core tactic Diversify your investments until no more diversity improves their risk-efficiency Modern Portfolio Theory (1952) adapted for an enterprise’s investments in change plus: Behavioural Economics as evidenced by the Investment Culture © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture © Copyright Dominic Barrow Services Limited. All rights reserved.
Why Culture is at the Heart of Strategy “Culture eats strategy for breakfast” Peter Drucker © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture - Diagnosis © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture - Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Comparing Investment Cultures (Example) © Copyright Dominic Barrow Services Limited. All rights reserved.
Does The Diagnosis Expose Any Paradoxes? Do all the answers seem consistent with each other? © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – What to Keep, What to Change? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – What to Target? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
The Enterprise Investment Portfolio © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment – Promise and First Principle Achieving your goals for both structure and value as risk-efficiently as possible Investment is about scenarios and probabilities not certainties © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Achieving your goals for both structure and value as risk-efficiently as possible Core tactic Diversify your investments until no more diversity improves their risk-efficiency Modern Portfolio Theory (1952) adapted for an enterprise’s investments in change plus: Behavioural Economics as evidenced by the Investment Culture © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – What to Target? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
“Investment Portfolio” (Inventory) Project Sponsor Capital €000 Apex 1 Tim Kahns 30,675 +49,376 Apex 2 Tim Kahns 46,230 +78,024 Redevelop Spartan Frances West 10,103 +36,200 CRMX version 3.6 Jerry Young 7,589 +22,017 V36 compliance Debbie Grant 31,120 +42,000 Web access to GRZA James Turner 12,974 +27,017 Refresh AOP and FFR Frances West 28,913 +48,384 Upgrade TRANSOP3 James Turner 62,252 +94,105 Building 21 Geoff Holden 96,048 +119,016 Firetop Phase 3 Julia Graham 4,456 +81,082 Firetop Phase 4 Julia Graham 1,940 +5,978 Replace WRKFLM Leo McKendrick 7.659 +15,377 OpCon Automation Miles Harrison 4,957 +6,790 Project Trio Trevor Dean 61,481 +113,967 QQT version 6 Frances West 41,468 +72,991 447,865 © Copyright Dominic Barrow Services Limited. All rights reserved. NPV €000
Building a “Bottom-Up” Portfolio: The Smartie Matrix Change Projects Value Types A B C D E F G H I J Revenue protection & growth Cost control & reduction Productivity & efficiency Brand reputation Customer delight Employees satisfaction Compliance Survival Enterprise Architecture Primary value type Secondary value types Project Probability Paradox The higher the probability of approval, the lower the probability of success! © Copyright Dominic Barrow Services Limited. All rights reserved. K L M N O
Enterprise Investment Portfolio (Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
What Do We Know About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 Eur 000 Revenues (Net Sales) Operating Expenses © Copyright Dominic Barrow Services Limited. All rights reserved.
What Do We Know About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 €000 Revenues (Net Sales) Operating Expenses © Copyright Dominic Barrow Services Limited. All rights reserved.
What Do We Know About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 €000 Revenues (Net Sales) Operating Expenses EBIT per €1 of Revenues Revenues per €1 of Operating Expenses 3,9 0,15 3,8 0,10 3,7 0,05 3,6 ? 0,00 © Copyright Dominic Barrow Services Limited. All rights reserved. ?
Enterprise Architecture Scenario Planning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Architecture Scenario Planning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
End-to-End Process Core Capabilities and Governance © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Value Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
Enterprise Investment - End-to-End Process Innovate Invest Execute © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
Enterprise Investment - End-to-End Process Investor’s Perspective Innovate Invest Execute Exploit Innovate Invest Execute Exploit Implementer’s Perspective © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Process – Core Capabilities Contribution & Influence High Asset & Service Exploitation (Enterprise) Investment Portfolio Management Project Management (Implementation) Project Management (Investment) Enterprise Architecture Operations Management Sourcing Low Innovate Invest Execute Investment Process © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
Enterprise Investments Board Replaces “IT Governance Board” Sets investment goals, constraints, priorities Monitors aggregate performance of investments Examines predicted impacts of investments on future operating costs Scrutinises existing investments and steers their execution Approves or reject new proposals for investment © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Portfolio (Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Architecture Scenario Planning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Proposal Completed and presented by whoever will deliver the benefits Overall sequence of questions: - Primary goal, any secondary goals - Estimated costs - Preferred solution - Probability of success Whose behaviours will need to change, and how, for the investment to succeed? Specific people that success will depend upon Timescale, end-backwards © Copyright Dominic Barrow Services Limited. All rights reserved.
In Conclusion © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment – Promise and First Principle Achieving your goals for both structure and value as risk-efficiently as possible Investment is about scenarios and probabilities not certainties © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Value Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
Enterprise Investment Process – Core Capabilities Contribution & Influence High Asset & Service Exploitation (Enterprise) Investment Portfolio Management Project Management (Implementation) Project Management (Investment) Enterprise Architecture Operations Management Sourcing Low Innovate Invest Execute Investment Process © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
Enterprise Investment Culture - Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Culture – What to Keep, What to Change? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
Enterprise Investment Portfolio (Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
Summary Enterprise Investment emerging from IT (but doesn’t have to) Combination of Enterprise Architecture & Investments Management Culture eats strategy for breakfast - diagnose, handle with care Goals-driven and efficient investments portfolio Enterprise Architecture framed by alternative scenarios © Copyright Dominic Barrow Services Limited. All rights reserved.
The End Thank You Have a Safe Journey It's a metamorphosis © Copyright Dominic Barrow Services Limited. All rights reserved.
@ae_nv linkedin.com/company/ae-nv-sa

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AE Spot'On - Chris Potts - Enterprise investment: Combining EA and Investment Portfolio Management

  • 1.
  • 2.
  • 3.
    Enterprise Architecture isabout Enterpreneurship and Engineering
  • 4.
  • 5.
    Enterprise Investment Chris Potts AE,Heverlee 30th January 2014 © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 6.
    What I Do CorporateStrategist - Enterprise Investment Working with people around the world helping them to succeed with their strategies and to increase their value, contribution and influence Practitioner & Mentor Speaker & Facilitator Author of The FruITion Trilogy FRUITION RECREATION DEFRICTION © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 7.
    Enterprise Investment: HowAre We Doing? 70% of projects fail* *Does that mean 30% of projects succeed? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 8.
    Some Projects Succeed,Some Don’t -$115 million -$150 million -$120 million © Copyright Dominic Barrow Services Limited. All rights reserved. -$101 million
  • 9.
    Some Projects Succeed,Some Don’t +$919 million © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 10.
    The First Principleof Enterprise Investment Investment is about scenarios and probabilities not certainties Do you agree with this principle? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 11.
    Enterprise Investment From InformationTechnology to Enterprise Investment The Value Chain for Enterprise Investment Enterprise Investment Culture The Enterprise Investment Portfolio End-to-End Process, Core Capabilities and Governance © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 12.
    From Information Technology toEnterprise Investment © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 13.
    At the Heartof Every Strategy… Value People Money Technologies © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 14.
    The Four Generationsof Corporate Strategy for IT The FruITion Strategy® Fourth Generation Focus: Enterprise Investment Foundation: Portfolio of investments in change Third Generation Focus: IT Exploitation Second Generation IT Efficiency First Generation Technology Return on investments in business change The value people create by exploiting IT Foundation: Investments involving IT Focus: Cost and performance of IT services Foundation: IT spending (core capabilities, projects, services) Focus: Architecture & standards Foundation: IT roadmap © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 15.
    The Value Chain forEnterprise Investment © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 16.
    Enterprise Investment Achieving yourgoals for both structure and value as risk-efficiently as possible © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 17.
    The Porter ValueChain FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT SUPPORT ACTIVITIES TECHNOLOGY DEVELOPMENT PROCUREMENT INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTICS MARKETING & SALES SERVICE © Michael Porter PRIMARY ACTIVITIES Strategy? Enterprise Architecture? Investment Portfolio Management? Sourcing? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 18.
    The Enterprise InvestmentValue Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
  • 19.
    The Enterprise InvestmentValue Chain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
  • 20.
    The Enterprise InvestmentValue Chain “CIO” Enterprise Architecture Strategy Enterprise Investment Value Structure “CTO” Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
  • 21.
    Enterprise Investment –Measures of Success Enterprise Architecture Investments Management Achievement of agreed design characteristics Success of structural investments Influence on people’s strategies & plans Impact on portfolio productivity & efficiency Impact on time-to-first benefit in projects Achievement of agreed investment goals Percentage investment by value type Portfolio costs to P&L Each project: value milestones achieved Contribution of ‘exploitation projects’ Sourcing Supplier delivery to SLAs and Project Milestones Costs to cash versus budgets Business impacts of service disruptions Supplier added value (over & above contract) Mitigation of supply risks to agreed residual values © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 22.
    Investing in Stability,Investing in Change Strategy Enterprise Investment Goals Agents of Stability Invest in Stability Invest in Change Stability Change Operations Agents of Change Projects Predictabilities Probabilities Outcomes © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 23.
    Enterprise Investment –Investing in Stability and Change Achieving your goals for both structure and value as risk-efficiently as possible Core tactic Diversify your investments until no more diversity improves their risk-efficiency Modern Portfolio Theory (1952) adapted for an enterprise’s investments in change plus: Behavioural Economics as evidenced by the Investment Culture © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 24.
    Enterprise Investment Culture ©Copyright Dominic Barrow Services Limited. All rights reserved.
  • 25.
    Why Culture isat the Heart of Strategy “Culture eats strategy for breakfast” Peter Drucker © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 26.
    Enterprise Investment Culture- Diagnosis © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 27.
    Enterprise Investment Culture- Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 28.
    Enterprise Investment Culture– Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 29.
    Comparing Investment Cultures(Example) © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 30.
    Does The DiagnosisExpose Any Paradoxes? Do all the answers seem consistent with each other? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 31.
    Enterprise Investment Culture– Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 32.
    Enterprise Investment Culture– The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 33.
    Enterprise Investment Culture– Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 34.
    Enterprise Investment Culture– What to Keep, What to Change? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 35.
    Enterprise Investment Culture– What to Target? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 36.
    The Enterprise InvestmentPortfolio © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 37.
    Enterprise Investment –Promise and First Principle Achieving your goals for both structure and value as risk-efficiently as possible Investment is about scenarios and probabilities not certainties © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 38.
    Enterprise Investment Achieving yourgoals for both structure and value as risk-efficiently as possible Core tactic Diversify your investments until no more diversity improves their risk-efficiency Modern Portfolio Theory (1952) adapted for an enterprise’s investments in change plus: Behavioural Economics as evidenced by the Investment Culture © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 39.
    Enterprise Investment Culture– The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 40.
    Enterprise Investment Culture– What to Target? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 41.
    “Investment Portfolio” (Inventory) Project Sponsor Capital€000 Apex 1 Tim Kahns 30,675 +49,376 Apex 2 Tim Kahns 46,230 +78,024 Redevelop Spartan Frances West 10,103 +36,200 CRMX version 3.6 Jerry Young 7,589 +22,017 V36 compliance Debbie Grant 31,120 +42,000 Web access to GRZA James Turner 12,974 +27,017 Refresh AOP and FFR Frances West 28,913 +48,384 Upgrade TRANSOP3 James Turner 62,252 +94,105 Building 21 Geoff Holden 96,048 +119,016 Firetop Phase 3 Julia Graham 4,456 +81,082 Firetop Phase 4 Julia Graham 1,940 +5,978 Replace WRKFLM Leo McKendrick 7.659 +15,377 OpCon Automation Miles Harrison 4,957 +6,790 Project Trio Trevor Dean 61,481 +113,967 QQT version 6 Frances West 41,468 +72,991 447,865 © Copyright Dominic Barrow Services Limited. All rights reserved. NPV €000
  • 42.
    Building a “Bottom-Up”Portfolio: The Smartie Matrix Change Projects Value Types A B C D E F G H I J Revenue protection & growth Cost control & reduction Productivity & efficiency Brand reputation Customer delight Employees satisfaction Compliance Survival Enterprise Architecture Primary value type Secondary value types Project Probability Paradox The higher the probability of approval, the lower the probability of success! © Copyright Dominic Barrow Services Limited. All rights reserved. K L M N O
  • 43.
    Enterprise Investment Portfolio(Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 44.
    What Do WeKnow About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 Eur 000 Revenues (Net Sales) Operating Expenses © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 45.
    What Do WeKnow About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 €000 Revenues (Net Sales) Operating Expenses © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 46.
    What Do WeKnow About the Future? 2008 2009 2010 2011 2012 8,272 8,258 9,310 10,497 11,762 EBIT 779 834 1,118 1,249 1,345 Net Profits 401 441 613 683 735 2,103 2,109 2,412 2,807 3,166 €000 Revenues (Net Sales) Operating Expenses EBIT per €1 of Revenues Revenues per €1 of Operating Expenses 3,9 0,15 3,8 0,10 3,7 0,05 3,6 ? 0,00 © Copyright Dominic Barrow Services Limited. All rights reserved. ?
  • 47.
    Enterprise Architecture ScenarioPlanning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 48.
    Enterprise Architecture ScenarioPlanning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 49.
    End-to-End Process Core Capabilitiesand Governance © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 50.
    Enterprise Investment ValueChain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
  • 51.
    Enterprise Investment -End-to-End Process Innovate Invest Execute © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
  • 52.
    Enterprise Investment -End-to-End Process Investor’s Perspective Innovate Invest Execute Exploit Innovate Invest Execute Exploit Implementer’s Perspective © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 53.
    Enterprise Investment Process– Core Capabilities Contribution & Influence High Asset & Service Exploitation (Enterprise) Investment Portfolio Management Project Management (Implementation) Project Management (Investment) Enterprise Architecture Operations Management Sourcing Low Innovate Invest Execute Investment Process © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
  • 54.
    Enterprise Investments Board Replaces“IT Governance Board” Sets investment goals, constraints, priorities Monitors aggregate performance of investments Examines predicted impacts of investments on future operating costs Scrutinises existing investments and steers their execution Approves or reject new proposals for investment © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 55.
    Enterprise Investment Portfolio(Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 56.
    Enterprise Architecture ScenarioPlanning (Example Output) Customers De Facto Scenario Scenario A Scenario B Scenario C Scenario X Processes Products & Services Organisation Technologies Innovation Incremental Step Change Incremental Breakthrough Breakthrough Investment Low High High Medium Medium Innovation Incremental Incremental Incremental Step Change Step Change Investment Low Medium High Medium Medium Innovation Breakthrough Breakthrough Step Change Incremental Incremental Investment Low Medium Medium Low Low Innovation Step Change Incremental Breakthrough Incremental Step Change Investment Medium Medium Medium Medium High Innovation ? ? ? ? ? Investment ? ? ? ? ? © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 57.
    Enterprise Investment Proposal Completedand presented by whoever will deliver the benefits Overall sequence of questions: - Primary goal, any secondary goals - Estimated costs - Preferred solution - Probability of success Whose behaviours will need to change, and how, for the investment to succeed? Specific people that success will depend upon Timescale, end-backwards © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 58.
    In Conclusion © CopyrightDominic Barrow Services Limited. All rights reserved.
  • 59.
    Enterprise Investment –Promise and First Principle Achieving your goals for both structure and value as risk-efficiently as possible Investment is about scenarios and probabilities not certainties © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 60.
    Enterprise Investment ValueChain Strategy Enterprise Architecture Enterprise Investment Value Structure Sourcing People Services Products Supply (Internal/External – Cloud) © Copyright Dominic Barrow Services Limited. All rights reserved. Investment Portfolio Management
  • 61.
    Enterprise Investment Process– Core Capabilities Contribution & Influence High Asset & Service Exploitation (Enterprise) Investment Portfolio Management Project Management (Implementation) Project Management (Investment) Enterprise Architecture Operations Management Sourcing Low Innovate Invest Execute Investment Process © Copyright Dominic Barrow Services Limited. All rights reserved. Exploit
  • 62.
    Enterprise Investment Culture- Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 63.
    Enterprise Investment Culture– Example Diagnosis Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 64.
    Enterprise Investment Culture– The “Perfect Diagnosis” Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 65.
    Enterprise Investment Culture– What to Keep, What to Change? Dimension Prevailing Culture Considered always Considered last Avoided Considered first None Market Technical Internal Investment Portfolio Inventory Bottom-up Non-existent Top-down Targeting Outcomes Activities Outputs None Exploiting Assets & Services Central Missing Peripheral Intended Investment Strategy Random Strategic goals Operational goals Something else Accountable Nominal Absent Responsible Project Management Delivering change Time/cost/ quality ROI hypothesis Delivering value Impact on Operating Costs Important Ignored Interesting Critical Behaviour Towards Projects Controlling Influencing Undermining Not interested Value Creation Innovation Focus Sponsorship © Copyright Dominic Barrow Services Limited. All rights reserved.
  • 66.
    Enterprise Investment Portfolio(Live Projects) Value Type Investment Goals Project Investment Revenue protection & growth +€125m 2015 +€150m Value Project A 2014 Projects +€13,5m 7,2 Project B +€131,8m P&L Cost impact Probability Implementation Investment +3,9 High Medium 54,1 +12,6 Medium Medium Project C Cost control & reduction +€11,2m 3,7 +8,1 High Low Project D -€33,1m 11,5 -33,1 Medium Zero Project E -€25,1m 2,3 -25,3 High High Project F +0,31 9,7 -7,0 Medium Low Project G +0,63 30,5 +28,5 Medium Medium Project H +3,0% 52,5 +7,6 Low Low Project I +8,5% 74,6 +18,9 High Medium Project J +0,21 41,6 +9,4 High High Project K +0,16 33,1 +3,1 Zero Zero -€50m Zero increase +0,5 +1,0 Brand reputation +5,0% To be confirmed Customer delight +0,25 +0,40 +10,0% +5,0% Project L +12,5% 62,9 -3,0 High Low Compliance Yes Yes Project M Yes 49,0 +8,8 High Medium Survival Yes Yes Project N Yes 12,0 +4,5 High Medium Enterprise Architecture Yes Yes Project O Yes 76,6 +11,0 High High 521,3 +48,0 Productivity & Efficiency Employees satisfaction Investments and P&L costs are in € million, and include both actual costs and the cost equivalent of time © Copyright Dominic Barrow Services Limited. All rights reserved.
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    Summary Enterprise Investment emergingfrom IT (but doesn’t have to) Combination of Enterprise Architecture & Investments Management Culture eats strategy for breakfast - diagnose, handle with care Goals-driven and efficient investments portfolio Enterprise Architecture framed by alternative scenarios © Copyright Dominic Barrow Services Limited. All rights reserved.
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    The End Thank You Havea Safe Journey It's a metamorphosis © Copyright Dominic Barrow Services Limited. All rights reserved.
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