Optimising Sourcing during a Slowdown

1. Optimising Sourcing during a Slowdown Ashley Mudford CIO New Zealand Food Safety Authority CIO Forum June 2009

2. Purpose? …thinking options… …to help you to be more effective…

3. Sourcing • Increasing revenue • Decreasing cost • Releasing effort

4. Presentation Structure • Your Organisation’s Context • Options to think about

5. Principle 1 Business expectations will influence how you make change and/or optimise sourcing

6. Gartner Segmentation Model

7. Gartner Predictions At least 60% of large IT organizations will divide into at least two organizations by 2012, one working on sourcing and delivery of infrastructure, another on architecture and change.” “Their (architects) role within leading enterprises is moving from a technology focus to a focus on business processes and relationships” Source: Gartner, John Mahoney, Dec 2007

8. Depending upon which quadrant your team fits will determine how you approach sourcing and make change

9. Principle 2 The business’ perception of your providing value will influence the extent of change

10. Service Level Maturity Model SLA Maturity Levels Characteristics • Leading indicators of bus. processes clearly understood 5 • Problems prevented through proactive analysis Preventive • IT metrics completely integrated with business-unit 4 objectives and represented in terms of business results Integrated • Ability to segregate IT resources by business process • Business oriented (horizontally aligned) 3 • Analysis of root causes drives improvements Aligned • Metrics to understand the business impact of IT performance • Clear IT service tower definitions 2 • Functional metrics (IT tower-based, vertically focused) Functional • Metrics used to track performance over time • Few performance metrics 1 • Little emphasis on measurement and improvement Initial • Gartner research has found that there are five levels of service level maturity. • Possible to undertake a rapid evolution, but not feasible to skip evolutionary steps entirely.

11. Principle 3 The business’ perception of your degree of alignment and integration will help determine your value

12. Strategic Project 1 Strategic Business Process 1 Shared Services Policies & Procedures Programme Corporate Governance IM Programme etc Programme HR Programme Governance Chief Executive & Board

13. Business Consultation Group Files & Records Management Group Business Service Delivery Meetings Application Management Committees Web Programme Management Business Team Meetings Organisation Staff Updates Business Programme of Work IM Newsletters Business Interaction CIO

14. So… Where does your programme fit on these models? Depending upon your model… what is your focus?

15. Key tool • By Function/Service • What it delivers • What does it comprise • Total cost • Cost per ‘event’ per ‘person’ per ‘year’ • Options for change • Options for cost/service changes • What is delivered for each option • What is not delivered for each option • The risks for each option • Business decision on what they can live with

16. Projects • Review project benefits • Stop • Slow down • Delay • Continue

17. Grinder… then… • Review core business & stop doing non-core stuff • Confirm SLAs • Improve internal IT (& business) processes • efficiency • effectiveness • transparency • cost • Cost Benefit Analysis for outsourcing • Cost Benefit Analysis for different delivery options • shared services • cloud computing • Software as a Service

18. Grinder… then also… • Consolidate/standardise/rationalise • systems • organisation • equipment • Review licensing (conditions & alternatives) • Review contracts against cost & service levels • Review contracting regime against overlaps • Review technology for value • Benchmark • Find alternative sources of revenue • Shared services • consultancy

19. Entrepreneur… then… • Drive Grinders to make efficiencies & savings • IT&T • Applications • Review what resources are required to support business innovation • Architects • Analysts • Work with the business to initiate innovation: • Model business processes (end-to-end) • Identify business process improvements • Make measurable stretch improvement targets (reduce xxx process by xx% from ‘$a’ to ‘$b’ and ‘x’ time to ‘y’ time) • Support organisational change • Support benefit realisation

20. SLA maturity is low… then… • Work out how you can get to the next level of maturity with existing resources • Implement simple (to business) reporting matrix • It costs $100 per person per year to provide ‘this’ • Deliver x,000 per year • Market service improvements to the business • Mind you… if you’re starting now, you’re probably too late for immediate benefits…

21. Governance is low… then… • Research benefits for effective Governance • Identify key organisation influencers • Promote need for Governance • Actively support establishment of organisation governance model

22. Business Interaction is low… then… • Research benefits for increased business interaction • Develop interaction plan • Identify key business influencers • Promote need for increased business interaction • Make it happen • Use it to market programme achievements

23. What you are after is… The Business… • Having a high level of transparency and understanding of what you do • Advocating your case for what you can and can’t accomplish and at what price

24. But also remember… Really good people are hard to get irrespective of the state of the economy

25. ashley.mudford@nzfsa.govt.nz+64 4 894 2605 Thank you… …and best wishes with your thinking and action…