CIO cookbook shared service
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1 CIO cookbook shared service Mobilize, Execute, Sustain Munich, September 2006 Published in:
2 Cookbook/Steps/Milestones towards Shared Service Is a CIO shared service the most effective service strategy for our company? Translate company goals, develop and assess structural CIO alternatives How realistic is the implementation of the shared service option? Test stakeholder interest and critical success factors How obvious is the ultimate goal? A consolidated and benchmark ready service catalog is the goal, governance and effective structures are the path Are both levels of transformation tasks covered? Management- versus technology transformation Is a convincing management approach defined? Self financed restructuring approach with simultaneous change in direction Accompanying Multiproject- and Change Management: Mobilize and execute Use Case: Exemplary, consolidated service catalogue after creation of a Shared Service This document was provided for exclusive use by our customer. It is not complete without underlying detail analyses and presentation through dprp. The documentation contains elements, which represent intellectual property of dprp. Distribution to 3 rd parties is not permitted without exclusive authorization from dprp.
3 01 Value Proposition for ICT Shared Service A centralized ICT Shared Service is one of many strategic options; it unveils the biggest value if the companies' competitive strategy shall be supported by ICT and efficiency gains shall be realized at the same time. The CIO must strategically safeguard the structural decision. 3
4 02 Chances for successful implementation Transformation to an ICT Shared Service is a is conscious entrepreneurial acting at will, therefore 5 critical success factors should be answered by the CIO together with his management board. 5 Involvement Vision Self financed Communication, role model Stakeholder analysis: understand demand Force Field Analysis: recognize barriers and opposition Simultaneous restructuring Complexity reduction Optimizing asset utilization Kritische Erfolgsfaktoren zur Initialisierung Board Executive Management (CEO, CFO, COO, CIO) Key stakeholder (Profit Center, Key User) Sponsors Leading business system: Fast, Flexible, Collaborative Net centric organization 3 Centralizing IT across multiple business units Potential for differentiation in business system Internal call for action e.g. better integration Lack of app.. Services Dependency on service providers Compelling Event 2
5 02 Chances for successful implementation The managed transformation to a shared service along the phases, Mobilize, Execute and Sustain is critical Plan the transformation according to strategy without transmission loss Mobilize Leadership, Governance and Involvement of key personnel right from detailing the transformation plan; set challenging objectives, show presence and coach Value oriented detailing of change requirements along the value chain Detailed implementation planning with clear identification of value oriented milestones and responsibilities with focus on the early realization of tangible results Setup of TMO (Transformation Management Office) to support project management during the operative controlling of transformation projects Leadership Execute Setup of risk management to proactively assess and prioritize project risk and initiation of counter measures (AAA) including impact appreciation Establish value management to optimize the allocation of scare resources in alignment with assessed and prioritized value potential 5 Sustain Intensive Communication and workshops to cascade the know how through the enterprise Enablement of staff through active contribution fosters creativity and problem awareness thus boosting solution approaches and transformation Employees become corner pillars of the learning organization Optionally: Set-up of a Transformation Factory to build-up the new core competence with key personnel from this major transformation for future missions
6 03 Goal: Consolidated, benchmark ready service catalogue How obvious is the ultimate goal? A consolidated and benchmark ready service catalog is the goal, governance and effective structures are the path Decentralized ICT Service Centralized ICT Shared Service Board ICT Department Division 1. ICT Department Division N Governance Business Process Solutions Business Process Management Standardisierung ICT Shared Service Infrastructure & Operations Skill Pooling Service Management Best Practice Service Model Transformationsbüro Service Catalogue 1. Service Catalogue 2 6 ICT Service Complexity Similar services are provided separately; Exemplary differences: Performance attributes Delivery Documentation. Harmonized ICT Services
7 04 Transformation levels: Management- versus technology transformation To reach the ultimate goal of a consolidated benchmark ready service catalogue, the CIO organization must pursue a number of management- and technology projects during the transformation process. Managementtransformation Technologytransformation 7 Strategy formulation Governance Organizational model Business System: Order-to-Cash Teambuilding of new functional units Process model Project management system Metric system Best Practices Just-Enough service catalogue Contract- & claimmanagement Technology radar Requirements: - short term -long term System strategy Security System oriented architecture Horizontal versus vertical consolid. Standardization Modularization Operation concepts OLA management
8 05 Define management approach: Sef financed transformation The attractivity and feasibility of an ICT Shared Service transformation depends largely on the ability to self finance while contributing business value Convincing transformation approach,do the right things simultaneously Change in direction Restructuring Self financed 8 Winning Proposal
9 06 Begleitendes Multiprojekt- und Changemanagement Regelberichtswesen, Maßnahmencontrolling, Vorausschauendes Change Management, Team Building und Problemlösungscoaching sind wichtig, um Geschwindigkeit zu halten und nicht stecken zu bleiben Mobilisieren Planung der Transformation im Rahmen der Strategie Nutzenorientierte Detaillierung von Veränderungserfordernissen entlang der Wertschöpfungskette Detaillierte Umsetzungsplanung mit klarer Identifikation von ergebnisorientierten Meilensteinen, Verantwortlichkeiten, Fokus auf die frühe Realisierung von greifbaren Ergebnissen Herz und Verstand ergreifende Kommunikation und Rollenmodelle Aufbau eines TMO (Transformation Management Office): Governance, Methoden, Werkzeuge und Abläufe Schaffung von Transformationstransparenz: Status, Neue Potentiale und Risiken Transformationsmanagement Transformationsmanagement Durchhalten Unterstützung der Unternehmensleitung durch vorausschauende Identifikation von Handlungsbedarf und Entwicklung von Empfehlungen Aufsetzen eines Risiko-, Change- und Eskalationsmanagements Unterstützung der Teilprojektleitungen bei der aktiven, operativen Steuerung 9 Verankern Train the Trainer: Durch aktive Einbindung von geeigneten Mitarbeitern in Transformationsmanagementaufgaben, Coaching und Feedback, Job Rotation Multiplikation über Mentoren in der Linie Einführung von Performance Management sowie Messung von Prozessreife Förderung von Kreativität, Problembewußtsein und Transformationsverständnis durch aktive Mitarbeit der Belegschaft Mitarbeiter müssen zum tragenden Pfeiler der lernenden Organisation werden
10 06 Supporting Multiproject- und Changemanagement Conscious management and control of motivation and behavior through leadership, clear objectives and neutral facilitation on the basis of an integrated system of project- and change management are required to keep the project going. Motivation 10 Uninformed expectation of change First information Mobilize Uncertainty Depression Gain of Trust Managed Kick-Off & Nomination Cascade Clear roles & objectives Jour Fixes Regular Communications Role Model Dos & Don'ts Coaching Execute Realistic Optimism Win/Win situations Coaching AAA Convincement Success Stories Prepare Handover Sustain Sustainable Handover Maintain Best Practice Continuous Improvement Unmanaged Time
11 07 Use Case: Exemplary, consolidated service catalogue Current situation of ICT service landscape: The company wide capture with proven templates showed that similar services had been produced differently and have rarely been described with SLAs in a service catalogue Business unit/country Service landscape SAP Betrieb Mail Desktop Management Fertigung Entwickl. Vertrieb Logistik EMEA USA AP Services are different with respect to - Make vs. buy - Performance parameters 11 ICT Services User Help Desk LAN WAN Telephonie Rechenzentrum CAD Knowledge Mngmt. Weitere Services The services are delivered from different providers No standardized service descriptions and SLAs
12 07 Use Case: Exemplary, consolidated service catalogue The transition process from a heterogeneous to a harmonized service requires a proven methodology combined with enforcement power of the new shared service organization and its governance 1 Capture as is SOPs Service description 2 Group existing services to SOEs SOE 1 SOE 2 SOE n SOM SOM SOM SOM SOM SOM SOM SOM SOM SOM SOM SOM Assess the defined SOEs for: - Value creation - ICT delivery performance SOE Assess internal ICT-Cost vs. Target/ Market ( Benchmarking ) Align SOEs with core compentencies of ICT organization, Make-Or-Buy decision And definition of SOPs Develop SLAs and customer communication via established process = Assessment of service portfolio SOE Assessment Assessment Delivery Success Potential Capability 45% 55% Assessment Scheme Criteria Characteristics Weighting negative Index positive SOE SOE SOP SOE SOE SOE SLA 9, SLA 8, SLA 16 SOP = Service Offering Portfolio SOE = Service Offering Element SOM = Service Offering Module Consolidation
13 07 Use Case: Exemplary, consolidated service catalogue The result was contributing manifold value to the new benchmark ready CIO organization. Used as direct value for the ICT Organization 13 IT Service- catalogue (Service description, SLAs and OLAs) aligned description of requirements and IT-service basis for a new usage based billing of IT-services service description in IT-service contracts objectice criteria to measure contract compliance basis for standardization of IT infrastructure service normalization of IT-service Objective customer expectation Transparency about actual ICT usage Market prices and conditions Basis for Claim Management Reduction of IT Infrastructure- Cost Enables objective benchmarking
14 07 Use Case: Exemplary, consolidated service catalogue The new created ICT service could show in only 18 months how fast the restructured entity could perform: The break-even point was already reached during the transformation phase, financial as well as business system innovation targets have been over performed. Customer: Mission: Perimeter: Savings: Flexibility: Speed: Establishment of new business processes Management capabilities 14 Call for action Speed Flexibility Collaboration Multinational enterprise, division with more than employees and 7 Billion revenues Conception and implementation of a CIO shared service 4 countries, 4 business units, 350 employees in CIO and functional department >15 Mio. (sustainable year over year) through harmonization and standardization through structure and process model Transformation Mission Net centric organization Integrated business process management CIO shared services Initialization CEO/CIO back office coaching 1 consultant Stakeholder analysis SWOT Strategy/ Concept, Option Appraisal CEO/CIO Blue Print development Board Proposal 1 Consultant Operational Plan/ Business Case 4 months > 50 heads internal staff mobilised 12 subprojects 15 mio annual savings 10 consultants 18 months > 300 heads internal staff mobilised 20 subprojects 18 mio annual savings 3-6 consultants
15 Contact information Tengstrassse 24 D München Christoph Dewey Mobile + 49 (0) Phone: + 49 (0) Fax + 49 (0) christoph.dewey@dprp-consult.com 15 Jörg Plegge Mobile + 49 (0) Phone: + 49 (0) Fax + 49 (0) Joerg.Plegge@dprp-consult.com
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