CIO cookbook shared service

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CIO cookbook shared service

– Mobilize, Execute, Sustain –

Munich, September 2006

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C ookbook CIO Sha red Se rvic e

Cookbook/Steps/Milestones towards Shared Service

Is a CIO shared service the most effective service strategy for our

company?

Æ

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?

Æ

A consolidated and benchmark ready

service catalog is the goal, governance and effective structures are the path

Are both levels of transformation tasks covered?

Æ

Management- versus

technology transformation

Is a convincing management approach defined?

Æ

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

01 02 03 04 05 06 07

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Value Proposition for ICT Shared Service

01

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.

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Chances for successful implementation

02

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.

Vision

Centralizing IT across multiple business units

Kritische

Erfolgsfaktoren

zur

Initialisierung

1

Compelling Event

2

Potential for differentiation in business system

Internal call for action e.g. better integration Lack of app.. Services Dependency on service providers

Self financed

4 Simultaneous restructuring Complexity reduction Optimizing asset utilization

Involvement

Stakeholder analysis: understand demand

5

Force Field Analysis: recognize barriers and opposition

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Chances for successful implementation

The ‚managed transformation‘

to a shared service along the phases, ‚Mobilize, Execute and Sustain‘

is critical

02

Setup of TMO (Transformation Management Office) to support project management during the operative controlling of transformation projects

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

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

Plan the transformation according to strategy without transmission loss

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

Mobilize

Execute

Sustain

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Goal: Consolidated, benchmark ready service catalogue

03

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

Board

Centralized ICT Shared Service

Infrastructure & Operations Service Management ICT Shared Service Business Process Solutions Business Process Management Best Practice Service Model S tanda rd isie rung Gov e rn an c e Tr an sform a ti onsbür o Skil l Pooling

….

ICT Department Division N ICT Department Division N ICT Department Division 1 ICT Department Division 1

….

Service Catalogue 2 Service Catalogue 2 Service Catalogue 1 Service Catalogue 1

ICT Service Complexity Harmonized ICT Services

Similar services are provided separately; Exemplary differences: • Performance attributes • Delivery • Documentation •….

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Transformation levels:

Management- versus technology transformation

04

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.

Management-transformation

Technology-transformation

•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- & claim-management •Technology radar •Requirements: - short term - long term •System strategy •Security •System oriented architecture •Horizontal versus vertical consolid. •Standardization •Modularization •Operation concepts •OLA management

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Define management approach:

Sef financed transformation

05

The attractivity and feasibility of an ICT Shared Service transformation depends largely on the ability to

self finance while contributing business value

Change in direction

Restructuring

_{Restructuring}

Convincing transformation approach

,Do the right things simultaneously’

Convincing transformation approach

,Do the right things simultaneously’

Self

financed

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Begleitendes Multiprojekt- und Changemanagement

06

Regelberichtswesen, Maßnahmencontrolling, Vorausschauendes Change Management, Team Building

und Problemlösungscoaching sind wichtig, um Geschwindigkeit zu halten und nicht stecken zu bleiben

Mobilisieren

Durchhalten

Verankern

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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

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

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 Transformations-verständnis durch aktive Mitarbeit der Belegschaft

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Supporting Multiproject- und Changemanagement

06

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.

•First information

•Kick-Off & Nomination Cascade

•Clear roles &

objectives _•_{Jour Fixes}

•Regular Communi-cations •Success Stories •Prepare Handover •Handover •Maintain Best Practice •Continuous Improvement Uninformed expectation of change

Uncertainty Depression Gain of Trust Realistic Optimism •Role Model •Dos & Don'ts •Coaching Unmanaged Managed •Win/Win situations •Coaching •AAA Convincement Sustainable Motiv a tion Time

Sustain

Execute

Mobilize

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Use Case:

Exemplary, consolidated service catalogue

07

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

Services are different with respect to - Make vs. buy

- Performance parameters

The services are delivered from different providers

No standardized service descriptions and SLAs

SAP Betrieb Mail

Desktop Management User Help Desk

LAN Telephonie Rechenzentrum CAD Knowledge Mngmt. WAN Fe rtigung En tw ickl. Ve rt rie b Logisti k EMEA USA AP Weitere Services ICT Ser v ic es Business unit/country Service landscape

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Use Case:

Exemplary, consolidated service catalogue

07

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

Capture as is SOPs

Group existing services to SOEs

Develop SLAs and customer communication via established process

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

SLA 9, SLA 8, SLA 16

Service description

SOM SOM

SOE 1 SOE 2 SOE n

Assessment Scheme

Criteria Characteristics Weighting

A ssess men t D e liv e ry C a pa bilit y 45 % A ssess men t S uc cess P o te n ti al 55 % 1 2 3 4 5 Index negative positive

SOP = Service Offering Portfolio = Assessment of service portfolio

... ... ...

SOP

SOE SOE SOE SOE SOE SOE

1

2

6

3

4

5 C

o

ns

olidation

SOM SOM SOM SOM SOM SOM SOM SOM

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Use Case:

Exemplary, consolidated service catalogue

07

The result was contributing manifold value to the new benchmark ready CIO organization.

Objective customer expectation

… aligned description of requirements

and IT-service

Transparency about actual ICT

usage

… basis for a new usage based billing

of IT-services

Basis for „Claim Management“

… objectice criteria to measure

contract compliance

Market prices and conditions

… service description in IT-service

contracts

Enables objective benchmarking

… normalization of IT-service

direct value for the

ICT Organization

Reduction of IT

Infrastructure-Cost

… basis for standardization of IT

infrastructure service

IT

Service-catalogue

(Service descri

pti

o

n, SLAs

and O

L

As)

Used as …

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C ookbook CIO Sha red Se rvic e

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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: Multinational enterprise, division with more than 22.000 employees and €7 Billion revenues Mission: Conception and implementation of a CIO shared service

Perimeter: 4 countries, 4 business units, 350 employees in CIO and functional department Savings: >15 Mio. € (sustainable year over year)

Flexibility: through harmonization and standardization Speed: through structure and process model Establishment of new business processes

Management capabilities

Trans-formation

Operational

Plan/

Business

Case

Strategy/

Concept,

Option

Appraisal

Initialization

Mission

Call for

action

• Speed • Flexibility • Collaboration • Net centric organization • Integrated business process management • CIO shared • CEO/CIO back office coaching • 1 consultant • Stakeholder analysis • SWOT • CEO/CIO • Blue Print development • Board Proposal • 1 Consultant • 4 months • > 50 heads internal staff mobilised • 12 subprojects • 15 mio € annual savings • 18 months • > 300 heads internal staff mobilised • 20 subprojects • 18 mio € annual savings

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CIO cookbook shared service