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Cxo Advisor customer value proposition 2013 update
This document provides an overview of CXO Advisor, a company that advises, innovates, and drives change for clients. It aims to save clients 20-30% of IT costs over 3-5 years. CXO Advisor has expertise in advising clients, driving innovation through platforms like Outsystems, and facilitating change such as liberating legacy systems and implementing business process as a service. The document discusses CXO Advisor's approach and principles, which involve benchmarking performance, prioritizing projects, and aligning IT with business strategy and objectives.
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Cxo Advisor customer value proposition 2013 update
- 1. CXO Advisor Advise –Innovate – Change
- 2. Three strategic questions Wewill save you 20 – 30 % of your IT cost over 3 – 5 years…
- 3. We do 3things : - Advise Deeply experienced team Backed by Ovum in Africa – IT Finance strength Business – IT Transformation Model Innovate Return on Business Agility Rapid Innovation with Outsystems Business Model Innovation – Saas-it.net Change Liberate legacy - Adaptivity Business Process as a Service – Procurement, IT Finance, Portfolio Governance as a Service
- 4. Maintenance Innovation Why “as aService” for innovation Internal Systems 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 ≈ BPaaS & SaaS & PaaS & IaaS & HaaS Liberate your legacy…
- 5. SHARED SERVICES MODELSOURCES 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
- 6. What IT reallydoes – Terry White 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 … Agile Business - IT Transformation
- 7. How we seethe world: The three ‘roles’ in business Shared and support services Core business Strategy Leadership Innovation Given 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. What should we do? How should we doit? Getting it done! Strategy Leadership Innovation Provide the glue: “How do we service our customers?” Your Customer One golden thread Sales revenue vs. cost How we see the world: There is only one “C” Core business The people who pay for your products and services The people who use your services again and, refer others to you and, have choices and ultimately pay your salary The Customer needs cross functional, organisation wide alignment Gain Customers (Sales & marketing) Process orders Manufacture / Deliver services Distribute Collect Payment Shared and support services Finance and Administration Human Resources Information Technology Supply Chain Legal & Governance Support the core business in serving customers
- 9. How we seethe world: Business momentum Based on your rate of sales / against your cost burn rate Sales Costs Geography Staff Legacy All of these have their own cycle times Decisions which ignore cycle times tend to fail Shared and support services Core business Strategy Leadership Innovation Business momentum Current sales rate/ cost burn The business engine
- 10. The business driversof agility Shared and support services Core business Strategy Leadership Innovation Business momentum Deliver Fix Improve Service Differentiate Core business engine Value delivery engine Support engine Looming Threat Change Strategy Change Environment New products, markets, channels New, improved processes Service business growth Regulation, mandates New CxO, value propositionsFix support engine Training, upgrades New, improved processes Cloud, outsource, B Paas
- 11. Shared and support servicesCore business Strategy Leadership Innovation Business momentum Deliver Fix Improve Service Differentiate Sustainability Risk Strategic Risk Tactical Risk Uncertainty Operational Risk BTL activity drives cost ATL activity drives revenue Are we doing the right things?
- 12. Shared and support servicesCore business Strategy Leadership Innovation Business momentum Deliver Fix Improve Service Differentiate Risk Cost PoA Sustainability Risk Risk Cost efficiency Time Risk NPV/Time BTL- PBP CVA PBP CVA PoA Strategic Risk ROI = Breakeven? Benefits realisation Baseline ROI > IRR ROI = IRR + >40% ** Hit rate >70% PoA Time < 2yrs Hit rate > 50% PoA Horizon 1-3 yrs Hit rate > 30% PoA Horizon – 1-20 yrs Tactical Risk Uncertainty Historical CVA Ongoing Benefits TCO Current CVA Ongoing Benefits Current Performance Planned CVA Planned Benefits Planned Performance Risk Tolerance Operational Risk Can we measure them?
- 13. Financial Cost view Sharedand support services Core business Strategy Leadership Innovation Business momentum Deliver Fix Improve Service Differentiate Sustainability Risk Strategic Risk Tactical Risk Uncertainty Operational Risk Typically total fixed cost Typically Capex or New Services Contract Typically total variable cost
- 14. Financial Performance view Sharedand support services Core business Strategy Leadership Innovation Business momentum Deliver Fix Improve Service Differentiate Sustainability Risk Strategic Risk Tactical Risk Uncertainty Operational Risk Cost of sales Production Costs Return on Capital Employed / ROA Sales / Total Revenue Net cash flow / working capital Cash Value added
- 15. The 3RM isused at every stage 15 Formulate Strategy Strategic Plan Prioritise planned Initiatives Resource planned Initiatives Execute and track Run the Business Strategic inputs Innovation Research & Advisory Trends Business strategic inputs Where do we want to be? Whats important? Are we achieving what we should be?
- 16. APPROACH Change at thespeed of Business
- 17. Cost / savingsflow 17 CXO Advisor © Client distribution only Run the engine Budget ITWF IBR IL Strengthen IT Strengthen Engine Meaning Attention Results in change of momentum line costs Momentum line
- 18. Todays decisions drivesubsequent spend profiles 18 CXO Advisor © Client distribution only 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 Momentumline Momentum line Momentumline Year 1 Year 3 Year 2
- 19. Comparisons can berevealing 19 CXO Advisor © Client distribution only • Portfolio to budget Y0 • Year to year • Between divisions • Between countries • Between organisations Organisation 1 Organisation 2 Both spend the same… Which is better according to this benchmark?
- 20. CXO A D VI S O R Right of Way TM – Portfolio Prioritisation 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 • Prioriisation aligned with your strategic objectives • Rigourous & 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! The steps to portfolio prioritisation success Using the Right of WayT M processes & tools 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 Proioritise projects by strategically aligned utility scores Project 1 Project 2 Project 3 95 56 74 Project1 Project3 Project2Project … Project … Step 5 Step 3 Step 4 Step 1 Step 2 Score projects by contribution, utility & class 95 Do these Don’t do these
- 21. CXO A D VI S O R Performance pain points Benchmarking benefits Performance and cost benchmarking • Our legacy is draining our budget • Maintenance uses up to 80% of our resources • The drivers of our cost are unclear • We have too much inertia and bureaucracy • We are unable to innovate internally • We seem to keep digging the same hole • The balanced scorecard doesn't tell us if we’re missing something – it tends to be a lag indicator of performance • Follows 80/20 rule – focus on important performance issues • De-politicises performance • Clear definition of lead/lag drivers and appropriate response to each • Extract value from current processes / systems • All measures within 3RM paradigm – aligned to business strategy, resourcing, communication models The steps in indexing, base-lining and benchmarking Understand lead / lag measures, focus areas, levers of performance and index them Step 2 Benchmark only where focus will produce results Step 3 Know what the definition of performance is for each business driver Step 1 Execute value realisation plans Step 4 Legacy value Core value unlock
- 22. 3RM© - ROAengagement model 22 CXO Advisor © Client distribution only Baseline current agility & innovation Analyse drivers, resources and plan Show agile improvement opportunities Develop continuous innovation roadmap
- 23. Our Principals Transaction Advisory Business improvement IT Financial Management ITBusiness Alignment CIO and Financial Industry exprience Expert in Cloud enablement Cloud business models Cloud market dynamics Vendor transformation Ex-CIO/CTO of 20 000 strong ICT company Worldwide recognition of ICT management thinking Expert in IT Finance Author of three books on IT management Worked with IVI developing maturity frameworks for IT Value SaaS-it advises Microsoft, Nokia and others on Cloud go-to- market propositions Deep experience in Telecoms and ICT Profound insights into customer focused strategies Extensive experience Mergers, Acquisitions and operational restructures Held executive positions for global Information Technology and Telecommunicat ions companies. Established CXO Advisor Craig Terblanche Gerhardt van Wyngaardt Kim Andersen Terry White Anders Trolle-Schultz
- 24. Our partners Advise www.ovum.com CXO Advisor is backed by Ovum in Africa Innovate www.Outsystems.com CXO Advisor is an OutPartner Change www.Adaptivity.com CXO Advisor is a reseller and consulting partner
- 25.
Editor's Notes
- #2 This is our current tagline – not sure about it though – what is the customer call to action
- #7 IT is currently spending most of their time in delivering the technology.If there’s a challenge to this breakdown its most often that it is weighted too much in the IBR and IL space.But CEOs want a different profile of activity from their IT departments.
- #8 The metaphor that’s missed by most people – the blue is the glue that holds it all together
- #9 The metaphor of the customer being gold
- #10 Metaphor – you have three ‘engines’ that should support the customer ‘gold’
- #11 The engine delivers, you sometimes needs fixing (it’s broken) – Service (your car, your machinery – preventative maintenance). No good metaphor for ‘improve’ yet. Differentiate – change the environment (SLI), change the company (core), change the support structures.From a performance point of view:Strategic goals & operational objectivesFinancial performance and operational driversShort & long term pressuresTop-down and bottom-up pespectives
- #12 Shared services cost: Total costShared services cost: Revenue
- #15 Shared services cost: Total costShared services cost: Revenue
- #16 Need icons for the 3 Role Model, and perhaps icons for the ‘three’ stages – What should we do, how should we do it, do it