Softtek Break Through Savings No Need Offshore 2011 Asug Final

] No need to go offshore to

achieve break-through savings

Okamoto, Mauro [email protected]

mailto:[email protected]

Real Experience. Real Advantage.

[

2


[ My roots - 1

3


[ My Roots - 2

4


[

Transformation Ready

Rate of change has increased dramatically

Countries Companies People

50 years in 5 years

5


[ As change speeds up and complexity grows,

so does the cost of keeping the lights on

Percentage of the annual IT

budget spent on application

maintenance and support

* 66% - Forrester – Forrsights Budgets & Priorities Tracker Survey, Q2 2010

66%

6


[ Typical approach to savings may be a dead end

Original team New team

$$$$$$ $$$$$$

Onsite Offshore

7


[ Offshoring could be a dead end when …

• Short-term savings provide a false sense of progress

• Cultural barrier perpetuate or reinforce barriers to change

• Governance models remain at ad hoc maturity levels

• Important knowledge, talent and process is lost

• Rate cards discussions take center stage instead of productivity,

automation and efficiency

• Savings and impact remains inside IT, don’t necessarily

impact the business

8


[ Speed of industry change means the CIO

and his organization is under pressure

• Drop in credibility due to dismal

IT industry performance

• Burdens of legacy technology

hampers business’ agility

• Technology advancements outpace

ability to adopt at enterprise IT level

• Requirements grow exponentially

and budgets linearly (if at all)

9


[

85%

65%

30%

15%

10%

30%

50%

35%

5%

5%

20%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2005 2010 2015

Value-added IP

Process

Cheap Labor

Value

Offshore Arbitrage

CMM Six Sigma

Lean Outcome

based

Business Value of Services

Rate cards and cheap labor are a thing of the past

10


[

11

A high performing application organization model


[

0 20 40 60 80

Optimizing

Quantitatively

Managed

Defined

Repeatable

Ad Hoc

Oct-10

Mar-09

12

But few organizations have ventured

Source: Gartner (February 2011)

Distribution of Maturity Among Application Organizations


[

• Top 5 CPG and leading global brewer with

operations in 23 countries

• From ad-hoc process to IBS plus managed services

• From IT-centric organization to business process

focused organization

• Performance review linked to business outcomes

• Also tracking process accuracy, availability,

performance and responsiveness

• From and dozen of contractors to Business SLAs.

• Critical apps. performance: 100%, Non-critical 99.7%.

IT spending after transformation: 21% of baseline.

100% onshore.

No need to offshore to achieve break-though savings –

Case Study

13

IT spending evolution

IT spending evolution • Base year

for calculations

• Internally

managed

• Dozens of different

Contractors

• Service models:

Staff aug, T&M • Vendor

consolidation

• Control Demands

• Adjust Service

Levels

• ERP Stabilization

• Rationalization

• Infrastructure Integration

• Efficiency on Break/Fix

• Variable cost managed

• Support new initiatives

• Start managed

outsourcing

• Continuous Improvement

• Payment linked to

business process

performance

• 10% additional savings

year over year

2008 2009 2010 2011 (est.)

100%

53%

21% 19%


[ Why break-though savings

Innovation

33%

Operations

66% Operations

34%

Innovation

66%

After Before

14


[ Simple steps

15

Step I: Governance Model

Step II: Process Mapping

Step III: Services & SLAs Implementation

Step IV: Governance Model again


[ Step I – Governance Model

Business Requirements

• Governance model

• Managed Services (SLA)

• People > Service

• Ticket reduction

• End User Satisfaction

• Application > Business

• Dashboard – Monitoring

Process

• Financial Concepts

• Money Outbound

• Money Inbound

• Value Chain (Logistics)

• Value Chain (Production)

• Business Intelligence

People

• Change Management

• Service Workshop

• Governance Workshop

• Training

• Culture

Technology

• Project Office

• AMS

• Governance Tools

16


[ Step I: Governance Model

17

“As a Service”

Business Strategy

1. Configuration

2. Validation (Testing)

3. Data Management

4. Development

5. GRC

6. Change Management

7. Business Intelligence

8. Web Services/Mobile

Process Tree (BPPs)

My Business Drivers

SLA Implement

Service Delivery

Service Monitoring & Evaluating

Service Improvement

Governance Objectives

Business Objectives


[ Simple steps

18






[ Step II – Process Mapping

19


[ Step II – It’s all about Transformation

Information Management

Business Strategy

Business Process

Red Print®: change before designing SAP

20

• Before Blue Print: change organization before

blue print, solve business differences before

design

• Vision 5 years forward (Strategic Map)

and “Pain Points Inventory”

• Business Requirements

• Processes change

• Organizational Structure review

• Technology Architecture

• Change company policies, master data

and process


[ Simple steps

21






[ Step III - Tracking Management

22


[ Step – III Business Service Level Agreements (SLAs)

23


[ Simple steps

24






[ Step IV - Governance Again

25


[

State of the art / transformation

State of the art Facilities

State of the art Service design

State of the art

Governance

No Boundaries

Transparency

Easy Communication

All together

War Room (KPIs)

26

Application Catalog

Service Catalog

Critical Applications

Preventive Maintenance

Managed Services

Application Monitoring

Knowledge Management

SLAs

Issue/Risks

Performance

Goals

Meetings

Accountability

Cont. improvement

Vendor

Management


[

27

Overview: break-though savings model

• Model Assumptions

• Productivity + Managed + Business Driven

• Service Drivers

• Lower Cost + Better Service

• Service Model

• State of the art Infrastructure

• State of the art Services

• State of the art Governance

• Service Location

• Agnostic (but requires changing the model)


[ Cloud Services

Transformation Ready

Countries Companies People

50 years in 5 years


[ Past Present Future


[

] Thank you for participating.

Mauro Okamoto [email protected]

Please remember to complete and return your

evaluation form following this session.

For ongoing education in this area of focus, visit www.asug.com.

Softtek Break Through Savings No Need Offshore 2011 Asug Final

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