Unlocking the Value from Implementation & Delivery

1. Unlocking the Value from Implementation & Delivery R Ramki, SAP India

2. Agenda Are we investing in the right IT initiatives that are aligned with our organization’s goals? Are we realizing the full value potential of these investments? What governance, empowerment, business involvement and change management competencies are required to ensure value is achieved? How do we enforce benefit commitments with the same passion that we drive budget commitments?

3. Value Creation and IT When it comes to Value Creation, only 20% of the organizations get all the value Only 17% of organizations have a formal business case for their IT Projects 17% Business Case 0% 100% 20% Only 20% of organizations get measurable value from their IT initiatives Value Realization 0% 100% 5% Only 5% of organizations had any plans to realize the value in their business case Value Realization Plan 0% 100% Source: SAP Value Engineering analysis of 1,609 completed business case engagements

4. How do Companies Realize Value? Joint Business and IT initiatives drive 2.5x more value Joint IT and Business Driven Initiatives 20% 2.5X More Value IT and Business Units Disconnected % Improved Productivity Increased Value 8% 2% Improving Management Practices* Investing in IT Investing in IT while Improving Management Practices * Key performance improvements i.e. Lean Manufacturing, Performance Mgmt., Six Sigma. Source: “When It Lifts Productivity”, The McKinsey Quarterly, 2004 Number 4

5. Linking Vision to Value Alignment of Operational Drivers is Key to Achieving Value Value Technology Metrics Business Processes Strategy Vision

6. Value Management Lifecycle On-Time, On-Budget, On-Value “Capture Value” Business Need Investment Approval “Investment Justification” “Implement the Solution” Value Lifecycle Go Live

7. Why should we do this? 4 key elements of a great business case What proof of success is available? What issues do I face today? How should I execute? 1 Value Discovery • Finalize scope and project objectives • Baseline current performance • Build the business case • Identify key value drivers and KPIs

8. Programs that measure quantitative benefit attained Measurement drives benefit attainment Measuring Drives Time-to-Value Measurement Is Essential to Improve Time-to-Value On-time or Better 11% On-time or Better 73% No Measurement of Value Measurementof Value Source: 230 participants in ASUG/SAP Value Realization Survey Findings, 2006

9. 2 Highest Value Achieved From IT Investments Value Realization • Organization-wide mission clarity • Implement and Design for value • Design governance model • Define KPIs to track • Communication and change management • Training

10. Design to Value Discipline requires a solid methodology; otherwise adoption drops as project continues 2 75% 3 5 0 1 63% 61% 4 Business Blueprint 47% 45% Realization Go-Live Project Preparation Mission Alignment & Readiness 38% Final Prep 30% 28% 25% 23% 7% 4% Scope driven by ROI Project goals documented for guiding principles Business case translated to design strategy Design checked against business case Ownership for benefits assigned before go-live Consistent KPI development for operational improvement Adoption of Value Realization Maturity Level 3 – 4 Maturity Level 1 – 2 Source: ASUG/SAP Value Realization Survey Findings

11. Governance Model Executive Sponsor provides overall direction while PMO and CCC support unit-level roll-outs/ users Executive Sponsor/ Project Sponsor Executive Sponsor CMD/ Chairman of Board Central Project Sponsor Director/ Board Member Respective Project Sponsor for Unit Unit Heads Steering Committee Data Lead Central Process Managers Infrastructure Manager Project Manager Change Manager Data Manager Data Lead UNIT - 1 Central Core Team (PMO) Customer Competence Center (CCC) Process Owners Production Material Sales Project Manager Support Roll-out Manager User User User Functional Tech. Change Key User Key User Key User Training Manager Functional Leads Technical Leads Team Lead + Member Data Business Application Support UNIT - 2 AS ABOVE Infrastructure Support Functional Team Members Technical Team Members Service Desk & 3rd Level Support UNIT - N Template Management AS ABOVE Roll-out Management

12. Tracking KPIs KPIs are measured continuously: • During Business Blue-print Phase • Before Go-Live • 6 Months Post Go-Live • Every 6 Months Thereafter • Identify Process-specific KPIs and Owners 1 2 • Track Performance • KPI Owners Adopt Control Measures • Show-case Value Realized • Baseline KPI During Blue-print • Benchmark with Leaders 3

13. Communication and Change Management Change Management is the bridge from the ‘old’ to the ‘new’ Change Management Roadmap Structure, plan and control all roll-out related change management activities Stakeholder Management • Top Management Commitment • Strong Project Management • Continuous Monitoring • Robust Governance • A+ People Engaged Communication • Communication from Executive Sponsors to Show Commitment • Communication Plans • Communication Material Training • Training Needs Analysis • Training Material • Skilled Trainers Fewer and Lower Resistances • Every transformational project brings changes for the employees involved, which frequently leads to different kinds of resistances Higher Readiness for Change • Change Acceptance • Adoption of best practices • Lower customization

14. 3 Suppliers Value Optimization • Continuously measure performance • Identify further improvement opportunities • Define action • Leverage best practices • Continuous training Customers

15. Value Management is a Journey Value Management is the next generation of Change Management Value Management Value Portfolio Planning Mandatory Business Case Reactive IT

16. Success = Real Change Value Management is the next generation of Change Management Vision Communi- cation Skills Tools Incentives Action Plan = Real Change + + + + + Communi- cation Skills Tools Incentives Action Plan + + + + + = Confusion Vision Skills Tools Incentives Action Plan + + + + + = Rejection Vision Communi- cation Tools Incentives Action Plan + + + + + = Fear Vision Communi- cation Skills Incentives Action Plan + + + + + = Frustration Vision Communi- cation Skills Tools Action Plan = Slow Change + + + + + Vision Communi- cation Skills Tools Incentives + + + + + = Chaos

17. Thank You